An expensive lunch for Pakistan's Youth

A letter to Maryam Nawaz Sharif (http://youth.pmo.gov.pk)

Dear Maryam Nawaz Sharif and team,

Firstly, I want to appreciate the efforts you and your team have undertaken for the youth and the simple majority of the motherland. The prime minister's youth loan scheme is for the age group 21-45, with CNICs and are well connected to a high net worth individual or a govt employee. The govt has lots of issues which need to be tackled at priority. There are several risks which can cost our govt and our coming generations such as: indebted youth in an indebted nation funded by an indebted govt hence creating a vicious cycle. Refinancing the debt can become a huge task for the future govt and generation as it will be repaid after 8 years when possibly a different govt might be in power. Moreover, such usury driven funding will not be welcomed by many in our society and the cost of monitoring funds to the tune of billions of rupees will be an expensive task for the govt.

I do not restrict my argument to criticizing your plan but I want to add a suggestion which could be a win-win stunt for all.

1 - The govt must establish a SME fund which must be overlooked by the Finance Ministry and the judiciary or any other independent agency which will ensure transparency for the investors

2 - A board must be set up which comprises of individuals from different circles and backgrounds.

3 - Any individual/team interested in a venture must present a business plan with a 5 years projection before the board

4 - Post review the board/jury must acknowledge the review and within 30 days it must come up with the result, whether the fund is willing to provide seed funding or not. If not, then why.

5 - If yes, then certain covenants must be placed and the amount (ranging from 50% to 70%) must be put in the form of equity.

6 - A (put/call) option must be included in the covenant which will allow the fund to liquidate its stake in the venture (post 5 years at a premium)

7 - Don't benchmark your plan with what has been done in the US, but compare it what has been done in the UAE (Khalifa Fund) and many other countries in Africa (Rwanda, Tanzania & etc) are doing it too to create self-employment. Let’s be realistic we cannot print money like US.

8 - After 5 years, the govt must allow these businesses (based on their financial performance and business scalability) to get listed on a secondary listing (like AIM in the UK) and let the locals become multinationals for tomorrow.

Sister - kindly read, reflect and act!