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Home Articles Business Rs25bn interest-free loan scheme on the anvil

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ISLAMABAD: The government has decided to launch within a month a Rs25 billion, interest-free loan programme for poor households of rural areas.

The Prime Minister’s Interest-Free Loan Scheme will be administered through the Pakistan Poverty Alleviation Fund (PPAF) and is aimed at reaching out to one million people in three years.

Finance Minister Ishaq Dar chaired a meeting on Wednesday to review the scheme and approve deadlines for it.

Qazi Azmat Isa, the chief executive officer of the PPAF, briefed the minister about the programme’s concept paper, operations cost and disbursement process of the loans. Some 50 per cent of the money would go to women as per the prime minister’s directives.

In line with manifesto of the PML-N, the government would start granting loans at the earliest after working out the programme’s modalities, including its structural layout, before the end of March, Mr Dar said.

The minister shared the salient features of the scheme’s outreach plan and details of the workforce to be trained for delivery work.

He said the PPAF had outreach across the country and its expertise in undertaking a range of interventions would help the government design, implement and monitor the programme in partnership with organisations already engaged in undertaking poverty alleviation programmes through micro-finance, interest-free loan or livelihood initiatives.

The finance minister asked the PPAF to reach out to people living in areas not served by micro-finance initiatives and said the loan programme should have low operational cost.

In the first year of the programme, the government would provide loans of up to Rs25,000 per head to 250,000 people in the rural areas where even micro-financing facilities were not available, Mr Dar said.

According to some analysts, the loan programme is being launched with an eye on the local government elections in the country. The Supreme Court has asked Punjab to hold the polls by November 15. Sindh is also expected to hold the elections in November.

An official said hectic consultations were being made to finalise and launch the scheme at the earliest after the prime minister’s approval. The scheme would cover the entire country and loans would be distributed on the basis of population ratio like distribution of national revenues under the National Finance Commission.

However, special allocations would be made for Azad Kashmir, Gilgit-Baltistan, federal capital and Federally Administered Tribal Areas under the scheme.

The meeting chaired by the minister was attended by MNA Umer Ayub Khan, Dr Muhammad Amjad Saqib and secretaries of the economic affairs ministry.

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