PCMEA Has Urged The Government to Make a Stake in PM's Youth Business Loan Scheme

Vying for a stake in Prime Minister’s (PM) Youth Business Loan Scheme, the Pakistan Carpet Manufacturers and Exporters Association (PCMEA) has urged the Government to collaborate together for the disbursement of the loans under the PM’s scheme for creation of jobs in rural areas, empowerment of womenfolk and enhancement of exports.

According to the PCMEA, the carpet industry is best suited for employment generation in rural areas, which is the primary focus of the loan scheme.

In a written request to Prime Minister Nawaz Sharif, PCMEA chairman Akhtar Nazir Khan has emphasized that such loans could be used to establish small manufacturing units with 5 to 10 handlooms in rural areas.

Mr. Khan said that PCMEA would offer its services to scrutinize and recommend eligible candidates for these loans, and he also suggested that in order to ensure repayment, such loans should be distributed through exporters.

In the letter, PCMEA has urged the PM to reserve Pk Rs. 1 billion for the handmade carpet industry to create 13,000 employment opportunities in most poor areas and bottom five percent section of the society.

Noting that the carpet industry remains a labor-intensive industry, with high number of women workers, who work from home at lowest employment cost, Mr. Khan suggested that the Government should re-think on the criteria for extending loans, and emphasize more on trained manpower rather than education.

According to PCMEA, handmade carpet industry in Pakistan employs over one million people, and produces 100 exportable products with a minimum 600 percent value addition. However, despite being the largest cottage industry in the country, the industry remains highly unorganized.

On the eight percent mark-up, PCMEA vice chairman Kamran Razi noted that the handmade carpet production being a lengthy and time-consuming process, the industry cannot afford such high mark-up rate. He thus suggested that the loans shall be provided at three percent service charges.

Mr. Razi said factors like rising inflation, utility rates and business losses have pushed the industry in a liquidity crunch situation, causing sector’s exports to decline from US$ 285-300 million per annum five years ago to $ 120 million in 2011-12.