# Business loans in Pakistan: SME loans and government schemes compared

URL: https://which.pk/money/guides/business-loan-pakistan/
Author: Ahtisham Imtiaz
Updated: 15 Oct 2026

## Summary

Government schemes are the cheapest business loans in Pakistan on paper. The PM Youth loan (PMYB&ALS) lends up to Rs 7.5 million at 0%, 5% or 7% to people aged 21 to 45, and Punjab's Asaan Karobar Finance (Rs 1 to 30 million) and Asaan Karobar Card (up to Rs 1 million) charge borrowers 0%. Whether these schemes are still open in October 2026 is unconfirmed. Commercial bank loans can cost far more: HBL Asaan Finance, up to Rs 10 million without collateral, is priced at 32% a year.

## Key facts

- PM Youth loan: Up to Rs 7.5m at 0-7%
- Asaan Karobar Finance: Rs 1-30m at 0%
- Asaan Karobar Card: Up to Rs 1m at 0%
- HBL Asaan Finance: Up to Rs 10m at 32%

The cheapest business loan in Pakistan is a government scheme, if you qualify and it is open. The PM Youth loan lends up to **Rs 7.5 million** at **0% to 7%** to people aged 21 to 45, and Punjab's Asaan Karobar schemes charge borrowers **0%**. Commercial bank SME loans can cost far more: HBL Asaan Finance, up to Rs 10 million without collateral, is priced at **32% a year** as of October 2026. Microfinance banks such as Mobilink lend from Rs 50,000 to small businesses.

**Check the scheme is still open before you apply:** We couldn't confirm that the PM Youth loan and the two Punjab Asaan Karobar schemes are still taking applications in October 2026. MCB's page says the PM Youth scheme was "valid till 30th June 2026", and we found no official extension. The Punjab schemes are listed as "Ongoing", but their application websites didn't load when we checked. Check the scheme portal, or ask the bank, before you apply.

## Which business loans can you get in Pakistan?

The table compares the published terms, as of the dates in the sources. "Clean" means no collateral, only your personal guarantee.

| Loan | Amount | Markup to you | Longest term | Age | Collateral |
|---|---|---|---|---|---|
| PM Youth loan (PMYB&ALS), all Pakistan | Up to Rs 7.5 million | 0%, 5% or 7% by tier | 8 years | 21 to 45 (18 for IT and e-commerce) | Clean up to Rs 1.5 million |
| Asaan Karobar Finance, Punjab | Rs 1 to 30 million | 0% | 5 years | 25 to 55 | Clean up to Rs 5 million, then secured |
| Asaan Karobar Card, Punjab | Up to Rs 1 million | 0% | 3 years | 21 to 57 | Clean |
| HBL Asaan Finance | Up to Rs 10 million | 32% a year | Renewed annually | 25 to 55 | Clean |
| UBL Karobar Loan | Up to Rs 40 million | Not published | 5 years | 21 to 65 | Property mortgage |
| Mobilink Karobar Plus (microfinance) | Rs 50,000 to Rs 5 million | Not stated plainly | 5 years | 18 to 64 | Not stated |

A short way to read it:

- **You're young and starting out anywhere in Pakistan:** the PM Youth loan charges 0% to 7% and asks for no collateral up to Rs 1.5 million, if it is still open.
- **Your business is in Punjab:** the Asaan Karobar Card (up to Rs 1 million) and Asaan Karobar Finance (Rs 1 to 30 million) charge you no markup.
- **You need working capital and have banked with HBL for 2 years:** HBL Asaan Finance needs no collateral but costs 32% a year.
- **You own property:** UBL's Karobar Loan lends against it, up to Rs 40 million.

## Is there a business loan in Pakistan without interest?

Yes, three government options charge you no markup. **PM Youth loan Tier 1** loans up to Rs 0.5 million are markup-free. **Asaan Karobar Finance** and the **Asaan Karobar Card** charge borrowers 0%, because the Punjab government pays the Bank of Punjab its markup of 6-month KIBOR plus 2.40% a year.

"Without interest" doesn't mean without cost. Asaan Karobar Finance has a processing fee, and the Asaan Karobar Card has a processing fee and an annual card fee (see below).

## What is the PM Youth loan scheme and who can apply?

The Prime Minister's Youth Business and Agriculture Loan Scheme (PMYB&ALS) is run through banks under SBP rules. You must be a Pakistani citizen with a CNIC, aged **21 to 45**. For IT and e-commerce businesses, the lower age limit is **18**. For a partnership or company, only one owner, partner or director needs to be in that age range, and both startups and existing youth-owned businesses can apply.

| Tier | Amount | Markup | Longest term | Security |
|---|---|---|---|---|
| Tier 1 | Up to Rs 0.5 million | 0% | 3 years, equal monthly instalments | Personal guarantee only |
| Tier 2 | Rs 0.5 to 1.5 million | 5% | 8 years, including up to 1 year grace | Personal guarantee only |
| Tier 3 | Rs 1.5 to 7.5 million | 7% | 8 years, including up to 1 year grace | The bank's own credit policy |

These terms are from SBP's scheme page as captured on 15 June 2026; SBP's own website blocks automated access, so we read an archived copy. Working capital loans in Tiers 2 and 3 run up to 5 years. A vehicle bought with the loan serves as collateral.

For a **new business**, you put in part of the money yourself: 10% for Tier 1 and 20% for Tiers 2 and 3. Existing businesses need no equity. The scheme covers long-term and working capital loans, murabaha, leasing, and one locally made commercial vehicle, and up to 65% of the limit can go on civil works.

**Tier 4: laptops and overseas jobs:** SBP's page also lists markup-free laptop loans of Rs 150,000, Rs 300,000 or Rs 450,000 over 4 years for students aged 18 to 30 at HEC-recognised institutions. It also lists loans up to Rs 1 million over 5 years for people going abroad to work.

## How do I apply for the PM Youth business loan online?

SBP lists the application portal as **pmybals.pmyp.gov.pk**. MCB also says you can apply at one of its branches. We couldn't open the portal to check its steps or confirm that it is accepting applications, because it loads as an app our tools can't read.

## What is Asaan Karobar Finance in Punjab?

CM Punjab Asaan Karobar Finance is a 0% markup loan for small and medium businesses in Punjab, lent through the Bank of Punjab and listed by the Punjab Small Industries Corporation (PSIC). It pays for a new business, new machinery or modernisation, expansion, working capital, cleaner-production technology, or leasing for commercial logistics.

- **Who can apply:** age 25 to 55, a valid CNIC and a valid NTN (National Tax Number), and a clean credit history in SBP's credit bureau (eCIB). For working capital, expansion or modernisation, the business premises must be owned or rented in your name or the business's name.
- **Tier 1:** Rs 1 to 5 million, clean loan with personal guarantees, processing fee **Rs 5,000**.
- **Tier 2:** Rs 5 to 30 million, secured loan, processing fee **Rs 10,000**.
- **Repayment:** equal monthly instalments over up to 5 years, with a grace period of 6 months for new businesses and 3 months for existing ones.

PSIC's page shows a target of 4,000 businesses and Rs 36 billion of lending. In January 2026, The News reported a second phase offering interest-free loans of **Rs 30 to 50 million** through four special schemes, with Rs 22 billion approved by then. PSIC's page still shows the first-phase limit of Rs 30 million, and we couldn't find official terms for the larger loans, so ask the Bank of Punjab.

If you don't have an NTN yet, see [how to get an NTN](/business/guides/how-to-get-ntn/).

## How does the Asaan Karobar Card loan work?

The CM Punjab Asaan Karobar Card is a 3-year scheme that gives a clean, interest-free loan of up to **Rs 1 million** on a digital card. You spend it on the business through the mobile app and card machines (POS), and cash spending is limited.

- **Who can apply:** age 21 to 57, a Punjab resident according to your CNIC, a business located in Punjab, and a mobile number registered in your own name. Both existing and new businesses can apply.
- **Repayment:** 3 years, with a 3-month grace period, then 33 monthly instalments.
- **Fees:** processing fee **Rs 500**. PSIC's page lists the annual card fee as **"Rs. 25000 + FED"** (FED is federal excise duty).

**Asaan Karobar Card annual fee, as printed by PSIC:** Rs. 25000 + FED (From PSIC's scheme page, read 15 Oct 2026. Confirm the fee with the Bank of Punjab before you apply.)

The News reported in January 2026 that Asaan Karobar Finance and the Asaan Karobar Card together had given Rs 70 billion of interest-free loans to 108,371 businesses in about six months.

## Can I get a business loan without collateral?

Yes, for smaller amounts. PM Youth loan Tiers 1 and 2 (up to Rs 1.5 million) need only your personal guarantee. Asaan Karobar Finance Tier 1 (Rs 1 to 5 million) and the Asaan Karobar Card are clean loans too.

From a bank, **HBL Asaan Finance** is a collateral-free running finance (an overdraft-style limit) for working capital, up to **Rs 10 million**, renewed each year. Larger bank loans can need security: UBL's Karobar Loan, for example, is secured against property.

## What is HBL's business loan interest rate?

HBL lists an annual markup of **32%** on HBL Asaan Finance, as of October 2026. For comparison, SBP's page in June 2026 showed the policy rate at 11.50% and 1-year KIBOR at 13.06%.

- **Who can apply:** a Pakistani resident aged 25 to 55, 3 years in your current line of business, an HBL account held for 2 years, a valid CNIC and a clean eCIB record.
- **Processing fee:** Rs 10,000 or 1% of the limit, whichever is higher.
- **Annual renewal fee:** Rs 6,000 or 0.6% of the limit, whichever is higher.

HBL also offers SBP's cheaper refinance schemes, which fund specific uses:

| SBP scheme through HBL | Limit | Rate listed | Longest term |
|---|---|---|---|
| Modernisation of SMEs (new machinery) | Rs 25 million small, Rs 200 million medium | 6% a year | 10 years, including up to 6 months grace |
| Working capital for small and low-end medium firms | Rs 25 million small, Rs 50 million medium | 6% a year | 1 year |
| Women entrepreneurs | Rs 5 million | 5% a year | 5 years, including up to 6 months grace |

HBL says each rate applies "or as per latest SBP directives" and that terms can change. We couldn't check SBP's pages to confirm the rates are current.

## What about UBL and microfinance business loans?

**UBL Karobar Loan** lends up to **Rs 40 million** (Rs 25 million for small enterprises) against a residential, commercial or industrial property, up to 75% of its forced sale value. Someone else's property can be used. You need to be 21 to 65 with at least 3 years in business, and sole proprietors, partnerships and private limited companies can apply. Term loans run 1 to 5 years and early settlement is allowed, but UBL doesn't publish its markup.

**Mobilink Microfinance Bank's Karobar Plus** lends **Rs 50,000 to Rs 5 million** for up to 5 years. You pay markup monthly or quarterly and the principal at the end. It is for businesses with net annual income under Rs 1.5 million, run by someone aged 18 to 64 with at least 2 years in business who isn't a defaulter.

Mobilink says it processes loans in 3 to 5 days and allows early settlement without a penalty. We couldn't find the markup rate stated on the product page, so ask for it in writing before you sign.

**What we didn't cover:** We didn't compare Meezan Bank's or Bank Alfalah's SME financing, because their websites block our checks. Ask their branches for a written rate and fee sheet.

## Personal loan or business loan?

Business loans ask for proof of the business. HBL and UBL want 3 years in business and Mobilink 2 years, and Asaan Karobar Finance needs an NTN and, for some loans, premises in your or the business's name. If you're comparing with borrowing in your own name, see [personal loans compared](/money/guides/personal-loan-pakistan/). For setting the business up on paper, see [how to register a sole proprietorship](/business/guides/how-to-register-sole-proprietorship/) and [business structures in Pakistan](/business/guides/business-structures-pakistan/).

More guides: [Loans](/money/loans/), [how to become a filer](/business/guides/how-to-become-filer/), [Money](/money/).

## Questions people ask

### Can I get an interest-free business loan in Pakistan?

Yes, through government schemes. PM Youth loan Tier 1 loans up to Rs 0.5 million carry no markup, and Punjab's Asaan Karobar Finance (Rs 1 to 30 million) and Asaan Karobar Card (up to Rs 1 million) charge borrowers 0%, with the Punjab government paying the bank's markup. Check that the scheme is still taking applications before you apply.

### What is the age limit for the PM Youth loan scheme?

SBP says applicants must be 21 to 45, with a lower limit of 18 for IT and e-commerce businesses. For partnerships and companies, only one owner, partner or director needs to fall in that range.

### Can I get a business loan in Pakistan without collateral?

Some loans are clean, meaning no collateral. PM Youth loan Tiers 1 and 2 need only your personal guarantee, Asaan Karobar Finance Tier 1 (Rs 1 to 5 million) and the Asaan Karobar Card are clean loans, and HBL Asaan Finance lends up to Rs 10 million without collateral at 32% a year. Larger bank loans, such as UBL's Karobar Loan, are secured against property.

### How do I apply for the PM Youth business loan?

SBP lists the online portal pmybals.pmyp.gov.pk, and MCB also accepts applications at its branches. MCB's page says the scheme was valid till 30 June 2026, so check the portal first to see whether it is still open.

### What markup do banks charge on SME loans?

It varies. HBL Asaan Finance, an unsecured running finance, is priced at 32% a year as of October 2026, and UBL's property-backed Karobar Loan doesn't publish a rate. SBP refinance schemes offered through HBL list concessional rates of 6% and 5%, or as per SBP's latest directives.

## Sources

- [Prime Minister's Youth Business and Agriculture Loan Scheme (PMYB&ALS), Internet Archive capture of 15 June 2026](https://web.archive.org/web/20260615105645/https://www.sbp.org.pk/Incen-others/PMYBALS.asp), State Bank of Pakistan (accessed 15 Oct 2026)
- [CM Punjab Asaan Karobar Finance](https://psic.punjab.gov.pk/node/178), Punjab Small Industries Corporation (accessed 15 Oct 2026)
- [CM Punjab Asaan Karobar Card](https://psic.punjab.gov.pk/node/177), Punjab Small Industries Corporation (accessed 15 Oct 2026)
- [Prime Minister Youth Business and Agriculture Loan Scheme (ex PMKJ-YES, now revised as PMYB&ALS)](https://www.mcb.com.pk/business/agriculture-financing/agriculture-products/prime-minister-youth-business-and-agriculture-loan-schemeex-pmkjyes-now-revised-as-pmybals), MCB Bank (accessed 15 Oct 2026)
- [HBL Asaan Finance](https://www.hbl.com/business/business/sme-banking/hbl-asaan-finance), HBL (accessed 15 Oct 2026)
- [SBP Refinancing Schemes](https://www.hbl.com/business/business/sme-banking/sbp-refinancing-schemes), HBL (accessed 15 Oct 2026)
- [UBL Business Mortgage Finance (Karobar Loan)](https://www.ubldigital.com/Banking/SME-Products-And-Services/UBL-Karobar-Loan), UBL (accessed 15 Oct 2026)
- [Karobar Plus Loan](https://mobilinkbank.com/loans/karobar-plus-loan), Mobilink Microfinance Bank (accessed 15 Oct 2026)
- [CM Asaan Karobar Finance Scheme: Rs30m to Rs50m loans being offered in phase 2](https://www.thenews.pk/print/1390675-cm-asaan-karobar-finance-scheme-rs30m-to-rs50m-loans-being-offered-in-phase-2), The News (accessed 15 Oct 2026)