How To Get A Business Loan In Pakistan Without Interest?

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How To Get A Business Loan In Pakistan Without Interest?

Starting a business requires a lot of money, which isn\’t always possible. As a result, many people turn to banks for business loans to fund their projects. However, due to the high-interest rates, most consumers are hesitant to take out a bank loan. Keeping the religious perspective in mind, most Pakistanis seek out banks that offer interest-free digital loans. While numerous Islamic banks throughout the country provide this service, there is always a catch.

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1 – Al-Khidmat Foundation Mawakhat program

Starting a business requires a lot of money, which isn\’t always possible. As a result, many people turn to banks for business loans to fund their projects. However, due to the high-interest rates, most consumers are hesitant to take out a bank loan.

Keeping the religious perspective in mind, most Pakistanis seek out banks that offer interest-free business loans. While numerous Islamic banks throughout the country provide this service, there is always a catch.

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Vision

Al-Khidmat\’s vision is to help the needy in Pakistan\’s various regions.

Mission

This program\’s goal is to implement an Islamic Microfinance paradigm to alleviate poverty. It offers low-income persons interest-free loans to help them better their living conditions. The organisation itself follows Islamic banking regulations. It allows people to survive in a harsh economic situation.

This curriculum adheres to Islamic teachings and standards while also assisting individuals in gaining information, skills, and abilities to begin earning. Schemes are divided into two categories:

Home Base Schooling 

Under the home-based schooling programme, an interest-free loan is available. By investing 1,542,500 rupees in low-income persons, this scheme has already aided 50 families in Karachi.

Mobile vocational trainer

Al-Khidmat Foundation Pakistan recognises the value of talents and, via this initiative, assists people in acquiring a variety of skills that will help them achieve in life.

2 – Akhuwat Islamic MicroFinance 

 Akhuwat Islamic MicroFinance is a corporation that provides low-income people with interest-free microfinance loans. By improving people\’s lives, Akhuwat Islamic Microfinance promotes social justice and fraternity.

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Eligible criteria

The applicant must:

  • Have a valid CNIC
  • Have the ability to run a business at the initial stage
  • Be economically active
  • Should be 18-62 year’s of age
  • Should not have any criminal record
  • Have a good social and moral character.

The applicant needs two guarantors other than a family member for this loan. There are two types of loans under Akhuwat Microfinance.

 Group lending

Group lending involves three to six people. To each other, all members of the group furnish a guarantee and credentials. Group members use decision-making to tackle their social and economic concerns. Members should not be related, but they should live close by.

Individual loan

Individual loans are available to those who meet the eligibility requirements. They can apply for interest-free loans if they meet the prerequisites. To obtain a loan, the applicant must offer two guarantors.

3  – Dubai Islamic Business Finance

The laws and regulations of sharia govern all aspects of Dubai Islamic Business Finance. DIBPL enters Shirkatul Melk\’s customer relationship. It buys a portion of your home and leases your undivided share in exchange for a monthly rental.

Eligibility Criteria

  • The applicant must be Pakistani.
  • The applicant’s age should be between 26-40.
  • The applicant’s property must be located in Karachi, Lahore, Islamabad, Rawalpindi, Faisalabad, Multan, Bahawalpur, Sialkot, Gujranwala, Hyderabad, and Peshawar.
  • The property’s minimum value must be 2000,000.

Documents Required

Documents for applying to the scheme include:

  • Applicant’s CNIC
  • 2 passport size photographs
  • Tax returns
  • Utility bills
  • Copy proof of profession
  • Bank statement of 12 months
  • Copy of Co-partner’s CNIC

4 – International Finance Corporation

The International Finance Corporation (IFC) is a member of the World Bank Group. Its purpose is to alleviate poverty in society by giving people an opportunity to better their lives. The International Finance Corporation (IFC) is a non-profit organisation that focuses on financing small and medium-sized businesses. The IFC collaborated with financial institutions to help SMEs and boost economic growth in the country. IFC also maintains a dispute resolution facility in Karachi, which allows small businesses to address their issues without going to court. It collaborates with other financial institutions, such as HBL to help people.

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5 –  Prime Minister Youth Business Loan

Prime Minister Youth Business Loan has been established to provide loans to unemployed youth. This programme encourages educated young people to create their own company.

Terms and conditions

Here are the terms and conditions you should consider before applying for the scheme:

  • Mark-up 6% per annum
  • The maximum loan size will be 2 Million
  • The application fee is Rs. 100
  • Tenure will be 8 years maximum

Requirements of the Scheme

The following are the requirements of the Business Loan scheme that an applicant must fulfill.

  • Applicants must be of age between 21 and 45.
  • The applicant should be Pakistani with a valid CNIC.
  • An applicant with a new startup will show relevant technical skills/educational degrees.
  • A person who has an existing business will show involvement in the industry and genuine business concern.
  • The loan amount should be equal to or the same as the life insurance of the applicant.
  • The guarantor should have 1.5 times more net worth than the requested income. He should be a government employee for the remaining service of 8 years.
  • The applicant can provide more than three guarantors.

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Preferred Sectors

Preferred sectors for business investment for this scheme are:

  • Boutique
  • Beauty Clinic
  • Interior Decoration
  • Medical Store
  • Wholesale 
  • Dairy Farming
  • Poultry Farming
  • Meat Shop
  • Auto and Tractor parts manufacturing
  • Furniture Manufacturing

If you want to get interested in interest-free Business Loan to start your business in Pakistan, you now have all the knowledge to do it. All you need to do is think of an implementable business idea to start it without wasting time.

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