Punjab CM Approves ‘Assan Karobar Finance’ Scheme to Boost Small Businesses

Punjab CM Approves ‘Assan Karobar Finance’ Scheme to Boost Small Businesses

LAHORE: The Chief Minister of Punjab, Maryam Nawaz Sharif, has given her approval to the multibillion-peso initiative known as the CM Punjab Assan Karobar Finance scheme, which aims to boost economic development and empower small and medium enterprises in Punjab.

The Punjab cabinet will review and approve the program on Tuesday. This initiative aims to create jobs, increase exports, and promote regional economic growth by providing interest-free loans and extensive support. The Assan Karobar Finance scheme is designed to help entrepreneurs start new businesses, grow their current operations, and upgrade their facilities by funding working capital, balanbalancingrnization, upgrading or replacing machinery, and leasing commercial logistics. This program is available to all sectors, including agricultural SMEs, and complies with the guidelines established by the State Bank of Pakistan (SBP).

The program is divided into two levels according to the loan size. Tier-1 provides unsecured loans of up to Rs5 million, which require personal guarantees, whereas Tier-2 offers secured loans ranging from Rs5 million to Rs30 million. To be eligible, applicants must satisfy several requirements, such as being between the ages of 25 and 55, maintaining a clean credit history, and owning or renting their business location.

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The repayment term can extend to five years, with a six-month grace period for new (Greenfield) ventures and a three-month grace period for existing (Brownfield) enterprises. Alongside the financing program, the government has launched the Punjab CM Assan Karobar Card, a digital initiative to support small entrepreneurs in the region. This card provides interest-free loans of up to Rs1 million for three years, with a three-month grace period. The allocated funds are exclusively designated for business-related purposes through digital services such as mobile applications and point-of-sale systems, ensuring the loans are utilized as intended. This initiative aims to assist more than 100,000 small businesses within the province.

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The initiative also features various added benefits to support entrepreneurs’ success. These benefits include a capital subsidy that can reach up to Rs5 million for solar technology and cleaner production methods, alongside non-financial advisory support and new small industrial parks in strategic locations like Sialkot, Gujrat, and Quaidabad. The development of these parks will offer long-term land leases of as much as 30 years, allowing business owners to acquire affordable plots to establish and grow their enterprises without incurring the heavy expenses typically associated with land purchases. Additionally, there is a concentrated effort on the tannery industry in Sialkot, which includes plans to move tanneries to a specialized Tannery Zone to mitigate water pollution and improve the quality of leather exports.

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The government is set to implement Phase II of the Punjab CM Assan Karobar Finance scheme, which will have a broader scope and a budget of Rs100 billion, scheduled to begin in the next fiscal year (2025-26). This phase aims to support approximately 24,000 SMEs, resulting in a total loan disbursement of Rs379 billion, fostering ongoing growth and advancement throughout the province.

Through these initiatives, the Punjab government is offering financial assistance and establishing a strong ecosystem for SMEs to flourish. With interest-free loans, access to technical expertise, and improved infrastructure developments, the Punjab CM Assan Karobar Finance scheme is poised to revolutionize the entrepreneurial landscape in the province, laying the groundwork for a more prosperous future.