Punjab Small Industries Corporation launched a scheme titled “Rural Industrialization Programme” (RIP) approved by the Government in May 1986 with the condition that the entire loan of 220.00 lacs would be made available by the Corporation own resources and the Provincial Government will only pick up interest subsidy through Annual Development Programme (ADP).

Dutch Government with the approval of Pakistan Government to obtained Rs. 15.00 Crore as grant in aid under their financial and technical assistance programme with the conditions that an equal amount would be provided by the Pakistan side for the above schemes.

Due to resource constrained, the Government could not provide the necessary funds, hence they allowed PSIC to retain the advances provided to it as loan for the development of industrial estates in the Province and utilized the same as Punjab Government’s equity towards the Dutch Assistance Programme. However the mark-up on Government interest comes to about 15% p.a and the loan is being disbursed to the prospective entrepreneurs at subsidized mark-up of 7%v per annum, the Provincial Government agreed to provide subsidy of 8% to meet the differential through a scheme titled “Subsidy on Rural Industrialization Programme & Self Employment” which was approved by the Provincial Government in May, 1988.