Funding stopped for low-cost housing, Kamyab Jawan schemes
The government has adjourned the Mera Pakistan Mera Ghar (MPMG) and former Prime Minister Imran Khan’s Kamyab Jawan Youth Entrepreneurship Schemes (PMKJ-YES) and is reviewing the same.
The MPMG low-cost housing scheme has been stopped for a couple of months and the State Bank of Pakistan (SBP) has advised the banks to stop funding under the schemes.
The PTI-led government had launched the MPMG scheme to provide low-cost houses for low-income people. The loans were being given at subsidized rates.
The SBP informed that the government has decided to review and revise the scheme.
Since the policy interest rate has surged by 13.75%, the low-cost housing scheme looks difficult for the government to continue. Under pressure from the IMF, the government is willing to raise revenue to reduce its fiscal deficit due to which it has decided to withdraw all kinds of subsidies.
“In this regard, it is advised that the government of Pakistan is considering reviewing or revising features of the subject scheme in light of recent developments in the macroeconomic scenario,” the SBP stated. Hence, banks, development finance institutions (DFIs), and microfinance banks (MFBs) were directed to put further distributions under MPMG on hold from July 1 till August 31.
On the other hand, where partial disbursements have already been paid till June 30, 2022, banks, DFIs and MFBs may release the remaining payments under the MPMG, it added.
The SBP further said the government has decided to review and revise the Kamyab Jawan scheme and stop funding for 15 days. The scheme was initiated to support young Pakistanis and facilitate them with funds to start businesses.
“It is advised that the government of Pakistan is considering reviewing and revising features of the subject scheme in light of recent developments in the macroeconomic scenario,” according to a circular issued by the SBP.
So, banks that are the executing agencies under PMKJ-YES are directed to put on hold new disbursements from July 1, 2022, to July 15, 2022, the central bank said.