KP Interest-Free Youth Loan Scheme Fund Increased from Rs3 Billion to Rs5 Billion (2026 Update)
The Khyber Pakhtunkhwa (KP) Government has announced a major boost for youth financing: the interest-free youth loan scheme fund will be increased from Rs3 billion to Rs5 billion.
This update was announced by KP Chief Minister Mohammad Sohail Afridi during an event in Peshawar (as reported by Dawn on Feb 4, 2026).
✅ Quick Summary
- Previous fund: Rs3,000,000,000 (Rs3 billion)
- New fund: Rs5,000,000,000 (Rs5 billion)
- Increase: Rs2 billion
- Purpose: More interest-free/markup-free loans for KP youth to start or expand businesses
What this Rs5 Billion increase means for youth
A bigger fund generally means:
- More applicants can be covered
- Faster/disbursed cycles (depending on official schedule)
- Higher outreach across KP districts (including merged districts)
Important: This is a funding announcement. Updated application timelines and disbursement plans usually come through official portals/banks after the budget is operational.
KP Youth Loan Scheme (Ehsaas Naujawan) — Main Options
KP’s youth interest-free loans have been run through two major channels:
1) Bank of Khyber (BoK) — Bigger Loans (Business Groups/Clusters)
Type: Markup-free (interest-free)
Loan limit: PKR 1 million to 5 million
Who can apply (key rule): You cannot apply as a single person — applicants must form a registered firm/partnership of 3 to 5 people
Age: 18 to 35
Loan duration: Up to 8 years with a grace period of up to 20 months (as per scheme features)
✅ Best for: youth who want to launch/scale a proper business setup with partners (startup or existing business with growth potential).
2) Akhuwat (Microfinance) — Smaller Loans (Individuals)
In earlier phases of the KP youth loan program, the Akhuwat component offered:
- PKR 100,000 to 500,000 for small business ventures
- Age: 18 to 40
- Special quotas for women and persons with disabilities (in the reported program structure)
✅ Best for: individuals planning a small business, shop, service work, tools/equipment setup, etc.
How to apply (safe + practical steps)
Step 1: Decide your loan type
- If you want PKR 1M–5M and can form a 3–5 person partnership, go for BoK component
- If you need PKR 100k–500k for a small setup, explore Akhuwat component
Step 2: Prepare basic requirements (recommended)
- Read the home page for the application process.
Step 3: Apply through official channels
- BoK typically accepts applications via its official “Apply Online” option for Ehsaas Naujawan
- Akhuwat applications are generally processed through branches/official forms (avoid agents)
Warning (Important for all applicants)
⚠️ Do not pay any agent for “guaranteed approval.”
Only use official bank portals/branches and official forms.
FAQs
Q1: Is this loan really interest-free?
Yes — the KP youth loan is described as interest-free / markup-free in official and reported scheme details.
Q2: What is the new total fund?
The KP government announced the fund will rise to Rs5 billion.
Q3: Can I apply alone for the Bank of Khyber (BoK) youth loan?
For the BoK component, applicants typically need a 3 to 5 person registered business/partnership (individual applications are not accepted for that component).
Q4: What’s the maximum loan amount?
- BoK component: up to PKR 5 million
- Akhuwat component (reported structure): up to PKR 500,000
Q5: When will the Rs5bn funding start?
This was announced as a funding increase. Exact rollout/disbursement timing depends on official notifications and implementation updates.
Source
Dawn (Feb 4, 2026) — KP funding increase announcement.