Skill ministry launches revised loan scheme, up to Rs 750K per student

The new credit guarantee scheme has now also been extended to NBFCs, MFIs and SFBs

The Ministry of Skill Development and Entrepreneurship (MSDE) on Thursday launched the revised model skill loan scheme aimed at providing access to skilling courses, two days after it was announced in her Budget speech by Finance Minister Nirmala Sitharaman. The move is expected to benefit 25,000 students every year.

The courses also include high-end courses that often come with high course fees, without any financial constraints.

As on March 31, loans amounting to Rs 115 crore were extended to 10,077 borrowers under the previous version of the scheme. The revised scheme will facilitate loans up to Rs 750,000 compared to Rs 150,000 earlier, and it will cover courses other than those aligned to the National Skill Qualifications Framework, provided the courses are available on the Skill India Digital Hub.

The new credit guarantee scheme has now also been extended to non-banking financial companies, micro finance institutions, and small finance banks.

Jayant Chaudhary, minister of state (independent charge) for MSDE, said the scheme empowers youth with financial support for advanced skilling through the instrument of collateral-free loans.

Aspiring candidates can now choose from a plethora of skill courses in sectors, such as health care, information technology, artificial intelligence (AI), data science, Cloud application, digital marketing, hospitality, animation, gaming, graphic designing, and drone technology. 

“Skill economy is increasingly market-led, with new-age learning integrating into the skill development ecosystem. Youth from urban and semi-urban areas recognise the available opportunities for skilling and livelihood improvement,” said Atul Kumar Tiwari, secretary, MSDE.

Nilambuj Sharan, senior economic advisor at MSDE, said many loan applications were rejected by financing institutions due to applicants’ inability to meet minimum credit requirements, such as maintaining an average bank balance and possessing a good credit score.