The Ministry of Skill Development and Entrepreneurship (MSDE) launched a revised model skill loan scheme on Thursday, just two days after it was announced by Finance Minister Nirmala Sitharaman in her Budget speech. This new scheme aims to provide financial access to skilling courses and is expected to benefit 25,000 students annually.
The revised scheme now includes high-end courses, which often come with high fees, without financial constraints. As of March 31, loans amounting to Rs 115 crore were extended to 10,077 borrowers under the previous scheme. The new version increases the loan limit from Rs 150,000 to Rs 750,000 and covers courses beyond those aligned with the National Skill Qualifications Framework, as long as they are available on the Skill India Digital Hub.
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The scheme’s credit guarantee has also been extended to non-banking financial companies, microfinance institutions, and small finance banks. Jayant Chaudhary, Minister of State for MSDE, stated that the scheme empowers youth with financial support for advanced skilling through collateral-free loans.
Aspiring candidates can now choose from a variety of skill courses in sectors such as healthcare, information technology, artificial intelligence, data science, Cloud applications, digital marketing, hospitality, animation, gaming, graphic design, and drone technology.
Atul Kumar Tiwari, Secretary of MSDE, noted that the skill economy is increasingly market-led, with new-age learning integrating into the skill development ecosystem. Youth from urban and semi-urban areas are recognizing the opportunities available for skilling and improving their livelihoods.
Nilambuj Sharan, Senior Economic Advisor at MSDE, mentioned that many loan applications were previously 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.