Media Coverage

Top leadership of Pakistan People's Party has labelled prime minister's Youth Loan Business Scheme a parallel system to Benazir Income Support Programme's Waseela-e-Haq project and plan to raise objections on the scheme in the parliament.

The BISP's Waseela-e-Haq scheme is for the beneficiary families currently receiving cash transfers under the programme. Micro-financing of up to Rs 300,000 is provided to the families that are selected randomly amongst the beneficiaries.

The BISP has been running the micro-financing scheme with the collaboration of Pakistan Poverty Alleviation Fund (PPAF). It is the primary responsibility of the PPAF to provide skills to families selected through balloting and help them establish their desired businesses.

Small loans up to Rs 300,000 are provided to the beneficiary families in two instalments and proper follow-ups ensure that the beneficiary has invested the amount in the business for which he/she availed.

The PPP leadership is of the view that there was no need to initiate a separate loan scheme while the BISP was already doing the same thing in a more efficient and professional way.

The BISP micro-financing is only for women beneficiaries but the recipient can hand over the small loan to a nominee like her son or husband.

On the other hand, the prime minister's loan scheme is for educated and skilled youth - with 50 percent for males and 50 percent females. The prime minister launched the Youth Business Loan initiative on Saturday with Rs100 billion allocated for the current financial year.

The scheme envisages providing Rs 100,000 to Rs 2,000,000 to 100,000 unemployed youth in the first phase. It is not yet clear how much of the allocated amount would be dedicated for micro finance and how much for small loans of up to 20 lakhs.

The prime minister's loan scheme may overlap the BISP's Waseela-e-Haq programme as some of its beneficiaries might also avail loans from the prime minister's scheme. At the moment, the BISP is providing financial aid to around 5.1 million poor families across the country.

Chairman BISP former Senator Enver Baig, however, said the BISP is a separate programme and would continue its functions smoothly as it has its own separate funds to run different projects across the country.

"The BISP provides financial aid to only those families who are identified in the poverty survey while the prime minister's loan scheme is open for general public," Baig said, adding that beneficiaries of the BISP could also avail the loan scheme if they fulfil the required criterion.

PPP Senator Farhatullah Babar told Business Recorder on Tuesday that the prime minister's loan scheme was flawed as the government has neither disclosed source of funds for the scheme nor a mechanism to get back the loan from the beneficiaries.

"There was no need to launch a parallel scheme to the BISP as the latter was already providing monetary benefits to poor people across the country," he said.

Babar said that the top leadership of his party has discussed the loan scheme at length and decided to raise valid objections on the scheme. "Leader of Opposition in the National Assembly Syed Khursheed Shah will raise the issue on floor of the house and demand the government to brief parliamentarians on the loan scheme," he added.

Dr Abid Sulehri, Executive Director Sustainable Development Policy Institute, said the scheme is not bad but the real thing is to ensure transparency to get the desired results.

He said that if the loans are given to people in a transparent manner and then they are helped to initiate their businesses, this would have positive impact on overall economy of the country.

"The basic purpose of the loan scheme should be making people entrepreneurs so that they could generate their own resources and ultimately help the economy of the country," he added.

Sulehri said that if the loans are utilised properly by the educated and skilled youth, this would also help bring down the spiralling unemployment in the next couple of years.