The federal government of Pakistan has introduced a new initiative aimed at providing financial assistance through soft loans of up to Rs1 million for prospective overseas workers, covering expenses related to training, travel, and visa. The initiative also includes loans of up to Rs450,000 for students, freelancers, and young entrepreneurs to help them purchase laptops, supporting their education, digital skills, and entrepreneurial activities.

The new financial assistance is part of the expansion of the Prime Minister’s Youth Business & Agriculture Loan Scheme (PMYB&ALS), which was announced by the State Bank of Pakistan (SBP). The scheme aims to support a broader demographic, particularly students, freelancers, and young professionals, by introducing new financial tiers, including the “Tier-4” category for laptop and overseas worker loans.

Soft Loans for Overseas Workers

As part of the newly introduced “Tier-4” loans, prospective overseas workers can now apply for loans up to Rs1 million. These loans are designed to cover training, travel, visa, and settlement expenses. The loan tenure can extend up to five years, with a favorable debt-to-equity ratio of 80:20. The bank interest rate will be KIBOR+3, but the end user will not incur any interest charges.

To be eligible for the loan, applicants must be Pakistani citizens aged between 21 and 45 years. They must hold a valid job or offer letter, authenticated by the respective Pakistan Mission abroad, Community Welfare Attaché (CWA), and the Overseas Employment Promoter (OEP). Applicants will also need to provide details about their overseas training or job offer to justify the loan’s use.

Laptop Financing for Students and Entrepreneurs

In addition to supporting overseas workers, the government has announced that loans will also be available for purchasing laptops. This financial support is aimed at students enrolled in Higher Education Commission (HEC)-recognized institutions, as well as freelancers and young entrepreneurs. Pakistani citizens between the ages of 18 and 30 years are eligible for this laptop financing if they are currently studying or planning to use the laptop for business purposes.

To streamline the process, an MOU will be signed between universities and banks to facilitate laptop financing. Universities will refer students to banks through the PMYP portal, and the banks will provide laptops to students based on an agreement. The loan installments will be added to students’ tuition fees, and the universities will collect the payments through the banks offering the loans.

Freelancers and young entrepreneurs will also be eligible for laptop loans, but they must submit a business plan demonstrating how the laptop will be used productively. Banks will assess the repayment capacity based on the applicant’s financial situation, including considering the joint income of a family member, if applicable.

Loan amounts for laptops will vary depending on the type of laptop:

• Basic laptops: Up to Rs150,000 or the actual cost, whichever is lower
• Medium laptops: Up to Rs300,000 or the actual cost, whichever is lower
• Advanced laptops: Up to Rs450,000 or the actual cost, whichever is lower

The loan repayment period will be up to four years, with an 80:20 debt-equity ratio and no interest charged to the end user.

Security and Guarantee for Loans

For both laptop and overseas worker loans, the security requirements will include personal guarantees from family members. For laptop loans, universities may hold the student’s degree as collateral until the loan is fully repaid. Similarly, for overseas worker loans, a personal guarantee from a family member or a joint loan with family members may be required.

To mitigate risks, the government will provide a 25% guarantee on the first loss of the disbursed loan portfolio. All commercial and Islamic banks will participate in providing financing under this initiative.

This new financial support initiative by the government is expected to empower Pakistani youth, enhance their digital skills, and help them pursue international job opportunities while promoting entrepreneurial ventures.