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The government Sunday introduced a host of concessional and easy-to-access loan schemes aimed at giving the unemployed youth a leg up by helping them start businesses as well as pursue higher education and vocational training.
Unveiling its Policies and Programs for Fiscal Year 2016/17, the government said the loans would be provided against academic certificates.
However, Sunday’s ann-ouncement did not explain who would provide the loans, how they would be financed and who would bear the risk arising from possible defaults.
ENTREPRENEURSHIP LOANS
The, it Sunday’s announcement, said unemployed youths would be provided concessional loans on the strength of their project proposals. Such loans would be easy-to-access and be extended by accepting the applicants’ academic certificates as loan guarantees.
While the bank and financial institutions (BFIs) require some sort of comparable collateral — usually fixed assets — to be put up before sanctioning any loan, the government’s new program aims to give loans to unemployed youth upon pledging just their academic certificates as the loan guarantee.
Also, before going forward with the loan process, BFIs have to be convinced about the capacity of the applicant — their qualification, experience, staff and partners, among others — to implement their project as well as whether the project itself is doable. But government’s announcement has not explained if all this will be a part of the process when it says loans will be handed ‘based on the project proposal’.
Bankers say that floating loans just on the basis of the project proposal and academic certificate by the BFIs is a bit risky.
“BFIs extend loans based on the viability of a project. It might be risky providing loans to the unemployed youths without considering this. In some countries BFIs do provide loans to the youth based on their proposals.
Unveiling its Policies and Programs for Fiscal Year 2016/17, the government said the loans would be provided against academic certificates.
However, Sunday’s ann-ouncement did not explain who would provide the loans, how they would be financed and who would bear the risk arising from possible defaults.
ENTREPRENEURSHIP LOANS
The, it Sunday’s announcement, said unemployed youths would be provided concessional loans on the strength of their project proposals. Such loans would be easy-to-access and be extended by accepting the applicants’ academic certificates as loan guarantees.
While the bank and financial institutions (BFIs) require some sort of comparable collateral — usually fixed assets — to be put up before sanctioning any loan, the government’s new program aims to give loans to unemployed youth upon pledging just their academic certificates as the loan guarantee.
Also, before going forward with the loan process, BFIs have to be convinced about the capacity of the applicant — their qualification, experience, staff and partners, among others — to implement their project as well as whether the project itself is doable. But government’s announcement has not explained if all this will be a part of the process when it says loans will be handed ‘based on the project proposal’.
Bankers say that floating loans just on the basis of the project proposal and academic certificate by the BFIs is a bit risky.
“BFIs extend loans based on the viability of a project. It might be risky providing loans to the unemployed youths without considering this. In some countries BFIs do provide loans to the youth based on their proposals.
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