PESHAWAR, Dec 19: The militancy-affected parts of Khyber Pakhtunkhwa with poor law and order situation have been left out of the provincial government’s microfinance Bacha Khan Khapal Rozgaar (self-employment) scheme, it is learnt.

The loan disbursement agency, according to the relevant circles, is not entertaining loan applications from areas that persist with militant activity, including pockets in Dera Ismail Khan and Upper Dir districts.

“When sanctioning loans, we see whether the area (of the loan seekers) has militant activity or not,” said an official of the provincial government.

The multibillion rupees official initiative apparently enjoys wide acceptance across the province as it involves an easy repayment schedule and contains zero interest, attracting the religious minded people in the militancy-affected parts.

According to sources, the self-employment scheme received a positive response in several of the militancy-affected districts, including Mingora, Shangla, Tank, Dir Lower, Hangu, and Dera Ismail Khan because ‘it entails greater acceptability for people opposed to interest payment on religious grounds.’

However, the areas that continue to persist with unfavourable law and order situation due to the militants’ presence have been left out of the scope of the government’s self employment initiative.

Since its launch in February 2011, the scheme has so far benefited 16, 281 individuals, including thousands of women across the province. The small loans of a total of over Rs1.48 billion have so far been issued, aiming to create self-employment opportunities at the grassroots level with an explicit objective to counter extremism by means of engaging the jobless individuals in healthy activities.

“The scheme is a huge success in Mingora, Kabal (previously the stronghold of fugitive Maulana Fazalullah aka Mullah Radio), and Shangla,” said Mr Falak Naz, branch manager, Bank of Khyber, Mingora, told Dawn over the telephone.

He said more than 13,000 individuals had been provided microfinance in district Mingora where the recovery rate stood at 100 percent. The provincial public sector Bank of Khyber has been engaged to carryout the microfinance schemes. The bank, said a banker, charged a four percent fee to cover costs of executing the scheme.

Official and banking circles, talking to Dawn, termed the scheme a ‘huge success.’ They based their claim on the rate of repayment which, according to informed sources, stands around 99.5 percent.

“A total of over Rs5 million has so far been received in repayments and the money raised so has again been reinvested in the revolving fund,” said a Peshawar-based BoK official.

Small loans of up to Rs100,000 each are sanctioned after establishing the credit worthiness of the successful loan applicants, according to him.

The Bank, he added, had constituted special teams to verify the credentials of all the applicants before sanctioning the loans.

When contacted, Noman Khan, the BoK’s branch manager at Tank, a militancy-affected district said the scheme had generated positive results in his district that shares borders with the restive South Waziristan Agency.

“Tank is a backward area and this particular scheme has helped created jobs at the grassroots level,” said Mr Khan. Giving a couple of examples, he said several of the borrowers bought Ching Quis (motorcycle-driven public transport vehicle) and some others had set up small merchant stores in villages.

“You need only a hundred thousand rupees to start a village merchant shop and be on your own,” said Mr Khan.

The Peshawar-based BoK official said the owner of a sweet shop had a stocks valuing Rs30,000 when he borrowed the money and now after two years the total value of his inventory stood at Rs800,000.

According to him, a total of 37,732 individuals have applied for the microfinance facility since its launch in 2011. Some 19,200 loan applications have been approved of which some 16,281 individuals have been lent the money.

The provincial government, according to the official, has so far released over Rs2.23 billion of which a total of Rs1.48 billion has been released and some Rs300 million would be released in the days to come.