Govt launches revamped scheme to facilitate skill loans of up to Rs 7.5L

A REVAMPED ‘ model skill loan scheme’ for skill development courses was launched by the government on Thursday, with a fresh maximum loan limit of Rs 7.5 lakh — up from the previous amount of Rs 1.5 lakh.

In her budget speech on Tuesday, Finance Minister Nirmala Sitharaman had announced that the model skill loan scheme will be “revised to facilitate loans up to Rs 7.5 lakh, with a guarantee from a governmentpromoted fund ”.“This is expected to help 25,0 00 students every year,” Sitharaman had said.

Launched in 2015, the reversion of the old scheme had been recording a low uptake.

Going by data presented at the launch of the revised scheme on Thursday, loans amounting to Rs 115.75 crore were extended to 10,077 borrowers until March 31 this year. The low fund utilisation has been attributed to the maximum loan limit of Rs 1.5 lakh and increase in fees for courses, leading to high- cost courses being out of the old scheme. Now, the revised scheme will see a broadened lending framework.

Earlier, only private, public and foreign banks — members of the Indian Banks’ Association — were eligible for facilitating loans. Under the revamped scheme, non- banking financial companies ( NBFCS), NBFC- MFIS ( microfinance institutions), and small finance banks can also be lending institutions, officials said.

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.

Launching the revamped scheme, MOS Jayant Chaudhary, Ministry, Skill Development and Entrepreneurship, said: “Technologies that we cannot even imagine today will be a reality in five to 10 years… this will lead to huge demands on our education system, and the job market will be in constant flux. I do not think our country is ready for it yet. We are going to work hard together to execute the plans.”

“There is a vision... the government today is talking about what will happen by 2047. That means, for the first time, the government is embarking on a vision to think strategically and not just for five years or to win the next poll... what the country’s circumstances and challenges will be and how we prepare ourselves... that’s a task. We were running a skill loan earlier, but the conditions were such that the impact we wanted on the job market and in people’s lives was not possible,” he said.