Youth Loan Scheme for Business and Agriculture – The Ideal Prime Minister’s Youth Program

Youth loan scheme under the Prime Minister’s Youth Program Initiative is an excellent initiative by the Federal Govt of Pakistan to provide financing facilities to youth with entrepreneurial potential. Entrepreneurial potential means the youth should have the skill, courage, and broad prospects to undertake successful business initiatives. The scheme provides the loan in 3 tiers with no markup in tier 1 and nominal markup in tier 2 and 3. The facility is provided through 15 Islamic, Commercial, and Small and Medium Enterprises (SME) Banks. Renowned commercial banks like NBP, HBL, MCB, UBL, ABL, and Meezan Bank are the major stakeholders of the scheme in collaboration with Govt of Pakistan.
The scheme is also renowned as a prime minister youth loan scheme, prime minister youth program, or simply PMYP in the general public. The scheme is the best, easiest, and cheapest youth loan in Pakistan.
Here is a detailed article, specifying the step-by-step process for submitting the PMYP Loan Application.
Prime Minister’s Youth Program – Business and Agriculture Loan Scheme
Before you apply for the Youth Loan Scheme at the official portal of the Prime Minister Youth Loan, you must go through the following terms and conditions of the PM Youth Loan Scheme.
Note: The Federal Govt of Pakistan is revamping the Youth Loan Scheme and it’s being made more attractive under the special advice of the Prime Minister, which is expected to be announced in the upcoming budget 2024-25 in June 2024

Terms & Conditions of the Youth Loan Scheme as per SBP Criteria
The following terms and conditions are devised for the prudent implementation of the scheme:

Identity
Age Limit
Agriculture Finance
Types of Loans
Loan Tiers and Limits
The loan scheme is distributed in 3 tiers as follows:
Loan Tiers | Loan Limits |
Tier – 1 | 0.5 Million |
Tier – 2 | Above 0.5 to 1.5 Million |
Tier – 3 | Above 1.5 to 7.5 Million |
Markup/Interest/Profit on the Loan
The mark/interest/profit of the loan tiers as mentioned as follows:
Loan Tiers | Markup/Interest/Profit |
Tier – 1 | Markup Free (Zero Markup) |
Tier – 2 | 5% Per Annum |
Tier – 3 | 7% Per Annum |
Loan Tenure
The Tenure of the Loan Tiers is as follows:
Loan Tiers | Maximum Tenure | Repayments |
Tier – 1 | For 3 years, for Agriculture Finance for Crops, It’s 1 Year | Equal Monthly Installments For Crops, a lump sum amount to be paid on or before crop harvesting. |
Tier – 2 | 8 Years (With a Grace Period of Up to 1 Year) | Repayments of the loan after the grace period |
Tier – 3 | 8 Years (With a Grace Period of Up to 1 Year) | Repayments of the loan after the grace period |
Tier – 2 & Tier – 3 Murabaha, Working Capital & Production Loans | 5 Years | Bank may opt for recovery of markup/interest/profit in first 2 years, and principal and profit in next 3 years with total term to loan be completed in 5 years. |
Debt Equity Ratio for the Borrowers
The Debt Equity Ratio of the loan under the scheme is as follows:
Loan Tiers | Business Type | Debt Equity Ratio |
Tier – 1 | New Businesses | 90:10 |
Tier – 2 | New Businesses | 80:20 |
Tier – 3 | New Businesses | 80:20 |
Loan Tiers | Business Type | Debt Equity Ratio |
Tier – 1 | Existing Businesses | Nil |
Tier – 2 | Existing Businesses | Nil |
Tier – 3 | Existing Businesses | Nil |
The equity contribution of the borrower will be required after the approval of the facility and will be in the shape of Cash or Immovable Property.
Security & Collateral of the Loan
The Security & Collateral of the loan tiers under the scheme are as mentioned as follows:
Loan Tiers | Security & Collateral |
Tier – 1 | Clean loan, no security or collateral is required, just the Personal Guarantee of the borrower is required |
Tier – 2 | Clean loan, no security or collateral is required, just the Personal Guarantee of the borrower is required |
Tier – 3 | Banks are required to take security as per their credit policy |
The vehicle(s) financed under any of the tiers will serve as the security of the loan.
Other Rules & Regulations
The banks are required to follow the rules and regulations as prescribed by the State Bank of Pakistan (SBP) and the Securities & Exchange Commission of Pakistan (SECP).
Future Updates – Youth Loan Scheme
Once the scheme is re-launched, you may find the complete details here at online portal to apply online.
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FAQs
Conclusion
The Prime Minister’s Youth Program for Business and Agriculture Loan is an excellent initiative by the Federal Govt of Pakistan. The Youth with passionate ambition and entrepreneurial mindset must grab this opportunity to prove themselves as a successful business enterprise. The purpose of the youth loan scheme is to empower the youth to take part in the country’s economic growth and to improve their income level by choosing the right business segment to make a successful story.
The youth must not miss the opportunity, need to plan the right business activity, and opt for concessional youth loan facility to make them a success story.