ISLAMABAD: The Prime Minister’s Youth Business Loan scheme appears to be losing steam, mainly because of hitches at the National Bank of Pakistan — the lead institution assigned to implement the subsidised programme.

The programme, launched in 2013, seems to have an overwhelming focus on Punjab despite the original plan to extend loan broadly on the basis of provincial population.

According to the official record, there has been duplication of loan approvals and disbursements for individuals on the same national identification card numbers or without completion of formalities.

Sources said the NBP itself was least interested in extending fresh loans following the removal of Prime Minister Nawaz Sharif’s daughter Maryam from the programme’s top position.

In a written response, the NBP said that loan disbursements were being made on the basis of provincial share in the National Finance Commission and denied slowing down the scheme or duplication in approval of loans.

The prime minister and the finance minister had repeatedly stated that loans would be extended on the basis of provincial population and the government would pick up the difference of mark-up rates over 8 per cent in the beginning. The interest rate for borrowers was subsequently reduced to 6pc. This was also notified by the PM Office saying the “SBP will ensure that loans are broadly in conformity with provincial populations”.

According to the official record, the first ballot was held in Islamabad on Feb 28, 2014, and 5,350 loans worth Rs5.2 billion were approved. Of this, 76.36pc (4,085) loans were given in Punjab, 12.5pc in Khyber Pakhtunkhwa, 6.4pc in Sindh, and less than 2pc each in AJK, Balochistan and Islamabad.

In the second ballot held on June 4, 2014, 5,099 loans worth Rs5.33bn were approved. Punjab got 77.64pc (3,959) loans of Rs4.1bn, KP 8.7pc, Sindh 7.04pc, AJK 2.41pc, Islamabad 1.67pc, Balochistan 1.18pc and Baltistan 1.18pc.

Interestingly, the NBP said the number of loan disbursements stood at 7,240 and amount of loans disbursed was Rs6.789bn with recovery rate of 96.5pc as of January 2016. However, in reply to another question, the bank claimed that it had approved more than 5,000 loans after the two ballots.

The NBP’s record, however, revealed about 9.24pc of loan amounts to be in default or classified and number of such loans is 8.96pc. This meant that a number of borrowers did not come back for the second or third tranche and were found ‘delinquent’.

The NBP said that strong controls were provided in the system to detect and stop any inter-role or intra-role duplication of both guarantors and applicants.

It said it did not have access to other bank’s database to screen its applications for controlling duplication in real time, but such duplication could be detected through ECIB (electronic credit information bureau) of the SBP which is mandatorily updated by all member banks by the month-end. “At this point in time, all borrowers in NBP portfolio are distinct individuals without any duplication,” it claimed.

Prima facie, this was not the case. For example, a customer from Mardan obtained Rs1.575 million from the NBP and Rs0.75m from the First Women Bank on the same CNIC number, address and profession.

The sources said one of the major reasons behind the non-processing of fresh applications was non-payment of dues to a software vendor (a software house) that provided the programme for loan processing. The NBP decided to develop in-house software and assigned the job to a team, but this could not become fully functional despite being put in place in November last year.

The NBP, however, denied it saying it honoured all its commitments on time and as per terms of the agreement.

The sources said that most of fresh applicants were being discouraged through delaying tactics and those with influential background were accepted and approved. The bank is required to process an application within 15 days, but it was taking 5-6 months in case of independent applicants.

The NBP said the central bank had done away with the requirement of ballots in September last year and applications were now approved without ballot subject to completion of pre-disbursement formalities.