Kamyab Pakistan Program Gets Bids From Four Banks

Four commercial banks have submitted bids to provide up to Rs. 30 billion in loans over the next three months under the Kamyab Pakistan Program, according to a report by The Express Tribune. The National Bank of Pakistan, the Bank of Punjab, Askari Bank, and Habib Bank Limited have sent in their bids to the Ministry of Finance. The ministry is seeking bids from commercial banks, the Pakistan Mortgage Refinance Company, and development finance institutions that are regulated by the State Bank of Pakistan. The banks offering the lowest interest rate above or below the three-month Karachi Interbank Offered Rate will be selected. The maximum limit on the interest rate that will be paid has been set at a three-month Karachi Interbank Offered Rate (KIBOR) plus nine percent per annum. Under the conditions of the International Monetary Fund, the government can provide a maximum monthly guarantee of Rs. 5 billion, while monthly loan disbursements can only be Rs. 10 billion. This is much lower than the initially planned amount of Rs. 43 billion. The cost of housing loans is estimated at 15 percent, of which two percent will be paid by the borrower and the remaining 13 percent will be borne by the government, for which Rs. 37 billion will be sourced from the budget. Moreover, the government will cover 50 percent of the losses incurred by the banks, which is half of what had been originally approved. About Rs. 152 billion (67 percent of the total loans) will be directed to 152,100 borrowers to allow them to purchase low-cost housing units during the fiscal years 2021-2022 and 2022-2023. Meanwhile, Rs. 23.8 billion will be distributed among 237,000 farmers in these two years. The Kamyab Pakistan Programme is a newly launched government program that is aimed at disbursing interest-free or highly concessionary loans of a total of Rs. 228 billion among 738,000 people. It is intended to provide low-income earners with loans of up to Rs. 500,000 for the establishment and expansion of their entrepreneurial activities.