Model Skill Loan Scheme is reform, liberalisation which was demand of the public: Shri Jayant Choudhary

Chandigarh, 27 July 2024 – Shri Jayant Chaudhary, Minister of State (Independent Charge), Ministry of Skill Development & Entrepreneurship (MSDE) and MoS, Ministry of Education, Government of India launched the revised Model Skill Loan Scheme aimed at providing access to skilling courses, including high-end courses which often come with high course fee, without any financial constraints. This will empower the youth of India to be future- ready workforce.

The scheme is aimed at providing easy access to advanced-level skill courses, which potentially pose a significant financial barrier for many deserving students and candidates to gain futuristic and in-demand industry skills.

Recognising the significant role played by NBFCs and Micro Finance Institutions in the skill loan market, the MSDE, with approval from the Ministry of Finance, has made pivotal modifications to the scheme guidelines. Now, NBFCs, Micro Finance Institutions, and Small Finance Banks will also be eligible to extend loans which will be backed by guarantee against default up to 75% of the loan disbursed. Furthermore, the maximum ticket size of individual loans eligible for credit guarantee cover has been increased to INR 7.50 lakhs from the earlier limit of INR 1.50 lakhs.

During the launch ceremony at Kaushal Bhawan, Shri Jayant Chaudhary, Minister of State (Independent Charge), Ministry of Skill Development & Entrepreneurship (MSDE) and Minister of State, Ministry of Education, Government of India, “The launch of the Model Skill Loan Scheme is a major milestone for our Ministry of Skill Development and Entrepreneurship. This scheme empowers youth with financial support for advanced skilling, through the instrument of collateral-free loans up to Rs7.5 lakh. NBFCs, NBFC-MFIs, & Small Finance Banks have also been made eligible lenders. As the world, including India, undergoes rapid technological and societal shifts, our education systems and job market must adapt to keep pace. We’re working hard towards a vision for 2047, with the government thinking strategically about these changes. This Model Skill Loan Scheme is a reform and liberalisation for which there was demand of the Public.”

Speaking on the occasion Shri Atul Kumar Tiwari, Secretary, MSDE said, “The ‘Skill Economy’ is increasingly market-led, with new-age learning integrating into the skill development ecosystem. Youths from urban and semi-urban areas recognise the available opportunities for skilling and livelihood improvement. With the help of this initiative, aspiring candidates can choose from a plethora of skill courses in sectors such as healthcare, IT, AI-data science, cloud application, digital marketing, hospitality, animation, gaming, graphic designing, and drone technology. These courses, driven by changing industry dynamics, offer substantial placement opportunities and potential for international mobility.

In absence of a vibrant skill loan market, many youths leaves many aspiring candidates without the necessary financial support to pursue their skill training. To ensure uninterrupted credit flow in the skilling sector and to provide low-income youths with access to affordable finance for specialised skill courses, the MSDE initially launched the Credit Guarantee Fund Scheme for Skill Development (CCFSSD) in July 2015. The new Model Skill Loan Scheme is the revised version of the same. It addresses the challenges of meeting the requirements of highly skilled workforce emerging from paced technological changes.

Gracing the event were Secretary, Ministry of Skill Development and Entrepreneurship (MSDE), Shri Atul Kumar Tiwari; AICTE, Shri T.G. Sitharam; Senior Economic Advisor, MSDE, Shri Nilambuj Sharan; alongside CEO, CEO, NSDC, nd MD, NSDC International, Shri Ved Mani Tiwari; Chairman, National Credit Guarantee Trustee Company (NCGTC), Shri Durgesh Pandey, Deputy CEO, Indian Banks Association, Shri Gopal Bhagat and CEO, Eduvanz Financial Services, Shri Varun Chopra.