By Muhammad Faisal
In the past five years, over two million interest-free loans have been provided through the Prime Minister’s Interest-Free Loan Programme, with a special focus on helping women. These loans have played a key role in improving the financial situation of many people in Pakistan.
The Success of Interest-Free Loans in Pakistan
The Poverty Alleviation Fund (PPAF) has disbursed 2.34 million loans, significantly improving the lives of 74.6% of the people who received them. What’s even more impressive is that 97.4% of the people who took out loans have successfully paid them back, showing strong financial responsibility and the programme’s effectiveness.
How Interest-Free Loans Are Being Used Across Different Sectors
The loans have been used in many different ways. About 31% of them went to commodity trading, 24% to livestock activities like poultry and fish farming, 20% to embroidery and handicrafts, 17% for services, 7% for manufacturing, and 1% for agriculture.
Training Programs Alongside Interest-Free Loans Help Boost Skills
In addition to the loans, the PPAF has also provided skill development and management training to over 49,000 people, almost half of whom are women.
As a result, 57% of those trained—76% of them women—have become self-employed, and 16% have found jobs with other employers.
How Interest-Free Loans Drive Financial Empowerment for Women
A PPAF official praised the programme as a strong example of financial empowerment. Beyond just numbers, he said it shows how focused economic help can create lasting change in communities.
The programme has especially helped women and small-scale business owners, increasing household incomes, supporting self-reliance, and creating jobs.
How Interest-Free Loans Are Shaping Pakistan’s Rural Economy
Experts believe the programme is a model for how public sector microfinance can work. With over 97% of loans paid back, it shows that people trust the system and are responsible with their repayments.
The programme has also improved public confidence in government-run welfare schemes by making the process transparent and supporting people at the community level.
The loans have helped boost economic activity in rural areas, where commercial banks often don’t lend money.
By supporting different sectors like livestock, services, and small businesses, the programme has created new opportunities and value chains in places that were previously overlooked by traditional lenders.
Looking ahead, experts believe that with continued focus on skills training and increasing women’s involvement, the programme will continue to drive inclusive growth.
As small entrepreneurs grow, they will become more stable contributors to Pakistan’s overall economy.
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