Business loans in Pakistan: SME loans and government schemes compared

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.

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.

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.

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.

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.

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).

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:

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.

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. For setting the business up on paper, see how to register a sole proprietorship and business structures in Pakistan.

More guides: Loans, how to become a filer, Money.