Although there is a lot of criticism from different quarters against Youth Loan Scheme introduced by the federal government, it may be termed as a positive step, however small, in the right direction. It aims at generating employment opportunities for the youth through mobilizing the Small and Medium Enterprises (SME) sector in our country. In fact, the SME sector plays a decisive role in reducing the poverty and unemployment level in any economy. Sadly, the banking sector in Pakistan has been neglecting this important sector of the economy for a long time. At present, the loan portfolios of the major banks clearly show that they have focused on the corporate and consumer financing instead of the small and medium loans.

Other countries have done a great job with SME schemes. The Grameen Bank founded by the noble-laureate, Dr Muhammad Yunus has gone a long way in accomplishing the desired goal of rural development and women uplift in Bangladesh. With 99% recovery rate, this bank introduced the group-based ‘solidarity lending’ system instead of demanding collateral security from the creditors like the traditional bankers.

The SME sector development can be turned into a success by introducing more micro-credit schemes and extending small loans to unemployed youth on soft terms.

MOHSIN RAZA MALIK,

Lahore, December 26.