Ehsaas Naujawan Programme for Merged Districts: Rs 2 Billion Interest-Free Loans Planned
The KP Government plans a new Rs 2,000 million interest-free loan scheme for youth of the Newly Merged Districts – Bajaur, Mohmand, Khyber, Kurram, Orakzai, North Waziristan and South Waziristan.
At a glance
| Scheme | Investment on Humans – Ehsaas Naujawan Program for Merged Districts (AIP 260050) |
|---|---|
| Total cost | Rs 2,000 million, 100% KP Government (Accelerated Implementation Programme) |
| Loan size | Rs 100,000 – 1.5 million (two windows) |
| Markup | 0% |
| Age | 18 – 35 years |
| Who | Permanent residents of the Newly Merged Districts |
| Status | Proposed – awaiting approval |
Why a separate scheme for the merged districts
The merged districts have about 1.5 million young people aged 18–35, but formal credit access there is put at below 5%. Years of conflict, weak infrastructure and few private-sector jobs have left many young people with ideas but no capital. The scheme builds on the province-wide Ehsaas Naujawan Programme and is designed for the merged districts’ conditions.
Two loan windows
| Component-I: Government-owned bank | Component-II: Islamic microfinance institution | |
|---|---|---|
| Loan size | Rs 500,000 – 1.5 million | Rs 100,000 – 500,000 |
| Markup | 0% | 0% (Islamic model) |
| Grace period | Up to 18 months | 1 month |
| Repayment | Up to 42 monthly instalments after the grace period | Up to 36 equal monthly instalments |
| Security | As per the bank’s policy | A guarantor – no property collateral |
| Best for | Larger ventures and business expansion | Small shops, trades and home-based businesses |
Loans can be used to start a new business, buy machinery, equipment or raw material, meet working-capital needs, or expand an existing business.
Businesses the scheme wants to support
- Livestock and dairy
- Agriculture and allied activities
- Retail shops and small trading
- Transport and logistics
- Tailoring, handicrafts and home-based work
- Mobile repair, workshops and technical services
- Freelancing, e-commerce and digital marketing
Climate-friendly ideas get priority: solar products, organic farming, nurseries and waste recycling.
Who can apply
- Permanent resident of a Newly Merged District, with a valid CNIC
- Age 18 to 35 years
- Able and willing to run a business
- Not blacklisted by NACTA, and not a defaulter of any financial institution
- Not already a borrower under another government loan scheme
- Good social standing in the community (microfinance window)
Special attention: at least 15% of loans for women, at least 5% for minorities and persons with disabilities, and priority for rural youth, madaris students and skilled youth.
Funding and timeline
| Financial year | Amount (Rs million) |
|---|---|
| 2026-27 | 1,000 |
| 2027-28 | 1,000 |
| Total | 2,000 |
Repaid loans will be lent again to new youth until June 2032, and the project is planned to finish by June 2033. About 5,000 to 7,000 young entrepreneurs are expected to benefit directly in the first cycle.
Documents you will need
| Bank window (Rs 0.5–1.5m) | Microfinance window (Rs 100k–500k) |
|---|---|
| Valid CNIC | Valid CNIC |
| Proof of permanent residence in a Merged District | Proof of permanent residence in a Merged District |
| Business feasibility or proposal, where applicable | Guarantor (social collateral) and their CNIC |
| Business registration documents, where the law requires them | Credit Information Report check (done by the institution) |
| Any other document the bank asks for | Any other document the institution asks for |
How the microfinance loan process works
- Application received with documents
- Social appraisal of the applicant
- Economic appraisal of the business
- Social collateral (guarantor) obtained
- Loan approved
- Loan disbursed
- Recovery and monitoring
Planned timeline
| Step | Planned timing (PC-I) |
|---|---|
| Agreements signed with the bank and microfinance institution | Q1 FY 2026-27 |
| Application system and awareness campaigns | Q1–Q2 FY 2026-27 |
| Applications received and appraised | Q2 FY 2026-27 onwards |
| First loans disbursed | Q2 FY 2026-27 |
| Phased lending and re-lending of repaid loans | FY 2026-27 to FY 2031-32 |
| Mid-term independent evaluation | FY 2028-29 |
| Final evaluation | FY 2031-32 |
| Project completion and exit arrangements | June 2033 |
Timings are as planned in the PC-I and may shift with approvals.
Who oversees the scheme
A steering committee chaired by the Additional Chief Secretary (Planning & Development) will supervise the scheme. Members include the Secretaries of Finance, P&D and Sports & Youth Affairs, representatives of the bank and the microfinance institution, and the Director Youth Affairs. A Project Management Unit in the Directorate of Youth Affairs will coordinate and monitor both windows, with quarterly progress reports. At the end, the revolving funds may move to a youth endowment fund.
What would my instalment be?
A Rs 1,000,000 bank-window loan repaid over 42 months after the grace period would be about Rs 23,810 a month. A Rs 200,000 microfinance loan over 36 months would be about Rs 5,556 a month. Try your own figures in the loan calculator.
When and how to apply
Applications will open after approval and the signing of agreements with the lending partners. Bookmark this page – we will add the official application link and dates as soon as they are announced.
Updates
- 3 Nov 2026: Added documents, loan process, planned timeline and oversight from the PC-I.
- 3 Nov 2026: Page published with details from the scheme’s PC-I (September 2026). Status: proposed.
Frequently asked questions
When can I apply?
Not yet. Applications will open after the PC-I is approved and agreements with the lending partners are signed. Bookmark this page – we will update it as soon as applications open.
Which districts are covered?
The Newly Merged Districts: Bajaur, Mohmand, Khyber, Kurram, Orakzai, North Waziristan and South Waziristan.
Do I need property as collateral?
No, not for the microfinance window – a guarantor is enough. The bank window will follow the bank’s own security policy.
I already have an Ehsaas Naujawan loan. Can I apply?
No. The scheme does not allow borrowing under two government loan schemes at the same time.
Qabaili azla ke naujawanon ke liye qarza kitna milega?
Bank window se Rs 5 lakh se Rs 15 lakh, aur microfinance window se Rs 1 lakh se Rs 5 lakh – dono bila sood (0%).
Will there be any interest?
No. Both windows are interest-free.
Official sources
- PC-I: Investment on Humans – Ehsaas Naujawan Program for Merged Districts (AIP 260050), Sports & Youth Affairs Department, Government of Khyber Pakhtunkhwa, September 2026
Always confirm details with the official source before applying.