e-bikes, rickshaws: SBP launches interest-free‘cost sharing scheme’

KARACHI: Following the federal government’s decision, the State Bank of Pakistan (SBP) has launched an interest-free cost sharing scheme for e-bikes and rickshaws/loaders to promote energy efficiency and accelerate the shift towards green technologies in the automotive sector.

According to the SBP, under the scheme around 116,000 e-bikes and 3,170 e-rickshaws or loaders will be financed during this fiscal year (FY26) at zero markup rate. As per the scheme details, the federal government will provide capital subsidies of up to Rs50,000 for e-bikes and Rs200,000 for rickshaws/loaders, with buyers required to contribute a minimum 20 percent equity.

The loans will be offered through banks under both conventional and Islamic financing modes, with a repayment period of up to two years for e-bikes and three years for rickshaws/loaders. Although, the bank pricing will be 6-month KIBOR +2.75 percent, however borrowers will not bear any interest costs as the government will provide a full markup subsidy, making the end-user rate zero percent.

At least 25 percent of e-bikes will be allocated for women, up to 10 percent for delivery or courier riders, and up to 30 percent of e-rickshaws/loaders for fleet operators. The scheme will be rolled out in two phases, beginning with 40,000 e-bikes and 1,000 e-rickshaws/loaders in the first phase while remaining 76000 e-bikes and 2,171 e-rickshaws/loaders will be distributed in the second phase.

All citizens of Pakistan, including residents of Gilgit-Baltistan and Azad Jammu & Kashmir, are eligible to apply for the scheme subject to age restrictions. For rickshaws and loaders, fleet operators will also be allowed to apply in addition to individual applicants. However, eligibility criteria for fleet operators will be determined by the Steering Committee.

Under the eligibility criteria, applicants for e-bikes must be at least 18 years old and not older than 65 at the time of applying. For rickshaws and loaders, the minimum age requirement has been set at 21 years, with the same upper limit of 65 years.

The maximum financing limit has been set at Rs200,000 for two-wheelers and Rs880,000 for three-wheelers. Any amount exceeding the capital subsidy will be borne by the borrower as part of the upfront equity payment, in line with the prescribed debt-to-equity ratio.

The scheme will be executed through a digital lending platform to ensure transparency and minimal human interaction. Banks will integrate their systems with a centralized portal hosted by the Ministry of Industries and Production and the Engineering Development Board (EDB). Vehicle models will be shortlisted by the EDB, while Original Equipment Manufacturers (OEMs) will be responsible for timely delivery and after-sales service.

To further support the program, the government has introduced a 20 percent Credit Loss Guarantee (CGL) on a first-loss basis and will cover verification costs through Nadra and PMD checks. Loan processing charges and early settlement fees have been waived, while borrowers will only bear registration, insurance, and repossession costs where applicable. CLG claim stage will be 180 days from the date the installment was due and not paid by the customer

Insurance Payment will be as per rates agreed with insurance companies (first year to be taken in advance) by individual banks, with yearly insurance cost in subsequent year(s) to be pro-rated in EMI. Rates to be negotiated with the insurance companies in coordination with Ministry of Industries & Production (MoI&P). Mandatory documents required for the scheme are valid CNIC and digital undertaking for driving license.

The SBP has advised the banks to gear up their systems and their integration with the Centralized portal of the scheme hosted by MoI&P/EDB for successful implementation of the scheme.

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