LAHORE - Keeping in view the plight of some previous schemes such as Yellow cab Scheme , the Prime Minister’s present youth loan programme also seems a totally flop scheme , as no practical step has been taken or detailed homework has been done to make this project result-oriented.
This loan programme despite having excellent features has several loopholes, which must be removed to make the loan scheme successful, observed Dr Muhammad Azam Roomi, Director Research – CWE, Bedford Shire University UK. The global expert on entrepreneurship and enterprise development facilitator was speaking at a capacity building programme arranged by the Lahore Economic Journalists Association here on Tuesday. Roomi, who is on a visit to Pakistan, said that success of this scheme could push the GDP growth rate up if it was planned on long-term basis, besides attracting more investment and bringing down crimes graph, as it is already experienced in dozens of countries. Terming the scheme as positive, he stressed the need for taking some practical steps to make it a success. He said that youth should be guided and educated on how they could better utilize the loan for personal development. He said that the government should have developed a long-term policy for these loans as results could not be achieved in one year. “The one-billion-dollar question in Pakistan these days is – how to make the PM Youth Business Loan Scheme successful. On the other hand, the government has already imposed strenuous, stringent and severe conditions for the guarantors by making them ‘jointly and severally liable’ for the defaulters.
There’s no doubt that in Pakistan, with the absence of venture capital funding culture and collateral free loans, both the micro-finance scheme and small and medium enterprise scheme have potential to create enterprise development opportunities contributing to the overall economic development. However, one must not forget the plight of similar schemes in other parts of the world and even in Pakistan where such loans did not reach the deserving.  “All over the world, the success of public sector business loan schemes depend upon an “integrated approach”, which consists of enterprise development skills, business support provision and creativity and innovation development as pre-requisites for applying and getting these loans approved. The integrated approach serves two purposes: first, it acts as a filter to identify the genuineness and readiness of potential youth to take the entrepreneurial leap; second, it enables these young people to plan their business effectively and efficiently by minimizing the failure risks.” Welcoming Roomi, LEJA President Ashraf Mehtab threw light on the objectives of the Association and Prime Minister’s Youth Business Loan Scheme . Dr Azam Roomi said that globally, majority of businesses fail in the first three years of their existence. One of the most cited reasons is improper planning. Although SMEDA is offering a template on their website about how to develop a business plan, however, first item in the template states: “A business plan is not required for PM’s youth business loan scheme”. “The first question which comes to my mind is how will lenders decide about the viability and success of the potential business? Are we going towards yet another scandal of sub-prime lending,” he put the question.