KP launches interest-free loan plan aimed at helping tribal youth

PESHAWAR -- The Khyber Pakhtunkhwa (KP) government has launched an interest-free loan programme for youth looking to start or expand a business as part of an effort to spur economic activity in tribal districts once battered by terrorism.

KP Chief Minister Mahmood Khan officially kicked off the "Insaf Rozgar Scheme" (Justice Employment Scheme) on June 20 by formally handing over loan letters to deserving youth from the newly merged tribal districts.

"The programme is aimed at providing a respectable and sustainable source of income to poverty- and terrorism-stricken youth in the newly merged tribal districts," KP Information Minister Shaukat Yousafzai said.

"Under the programme, Rs. 1 billion ($66 million) will be distributed as interest free loans among 5,500 deserving youth of the tribal districts," Yousafzai said.

The scheme will provide an opportunity for terrorism-affected youth of tribal districts to start their own businesses or to expand an existing one with the support of government, he added.

Under the loan programme, residents ages 18 to 50 belonging to the merged districts can apply for a loan ranging from Rs. 50,000 ($335) to Rs. 1 million ($6,600), Yousafzai said.

Chief Minister Khan already has distributed loan letters to 27 successful applicants -- including women -- who had applied for loans to start businesses, said Yousafzai. The enterprises include general stores and more specialised stores selling solar energy panels and batteries, cosmetics, textiles, shoes and sporting goods.

"The merger of FATA into KP [in 2018] was a daunting task for the provincial government, which we have accomplished successfully," Khan said at the ceremony. "Now, we are focused on mainstreaming the tribal districts, for which the initiation of the Insaf Rozgar Scheme is a landmark achievement."

Additional funds will become available for the loan programme on an as-needed basis once officials have evaluated the success of the scheme, he said.

Impact of terrorism

The economy of the erstwhile Federally Administered Tribal Areas (FATA) has long been reeling, hurt by the impact of militancy, terrorism and the associated displacement of residents.

The region was the epicentre of armed conflicts for many years until 2014, when security forces started Operation Zarb-e-Azb and other offensives to expel militants from their strongholds.

While militancy and terrorism have been a devastating setback for the tribal districts, the regional government is fully focusing on developing the merged districts to bring them to the level of other settled areas.

"This scheme will have a positive impact on the tribal belt, which has suffered greatly because of militancy," said Shakireen Shakir, president of the Tribal Areas Chamber of Commerce and Industry.

Businesses in the tribal districts have faced enormous losses because of the poor law-and-order situation in the wake of terrorism, said Shakir.

In some districts, including North and South Waziristan, business activities almost came to a complete halt because of militancy, and the loan programme should help spur more economic activity in the area, Shakir said.

Small loans will help borrowers start small and medium enterprises, which have a great potential for boosting the economy in the region, he said.

Bahadar Wazir Khan, former president of the FATA Students Federation and general secretary of the Tribal Youth Development Society, praised the initiative.

Having just completed his education, Khan, who is now looking for a job, said he was confident that the scheme would not only benefit him but thousands of other youth.

This is a good step taken by the government and it will benefit tribal youth who are mostly unemployed, he said.