Revamped Model Skill Loan Scheme | 29 Jul 2024

Source: IE

• The government has launched a revamped 'model skill loan scheme' aimed at enhancing accessibility to skill development courses with a significantly increased maximum loan limit.
• The new scheme raises the maximum loan limit from Rs 1.5 lakh to Rs 7.5 lakh. Initially launched in 2015, the old scheme saw low uptake due to insufficient loan limits.
• Announced in the Union Budget 2024-2025, the revised scheme aims to benefit 25,000 students annually. It now includes non-banking financial companies (NBFCs), NBFC-MFIs (micro-finance institutions), and small finance banks as eligible lending institutions.
• Broadened Course Access: The revised scheme will now allow access to more skill courses, against only national skill qualification framework (NSQF)-aligned courses under the old scheme. Also, non-NSQF courses that are onboarded on the Skill India Digital Hub platform will come under the scheme.
• Previous Performance: As of March 2024, loans amounting to Rs 115.75 crore were extended to 10,077 borrowers, highlighting low fund utilisation due to high course fees.

Read more: Skill Development in India