Context:
The Ministry of Skill Development & Entrepreneurship (MSDE) launched the revised Model Skill Loan Scheme.
Features of the scheme:
- The scheme helps students and candidates in accessing advanced skill courses that might be too expensive to afford but are needed in the present-day job market.
- The MSDE, with approval from the Ministry of Finance, has made significant 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 a guarantee against default up to 75% of the loan disbursed. - The maximum ticket size of individual loans eligible for credit guarantee cover has been increased to 7.50 lakhs rupees from 1.50 lakhs.
Significance of the scheme
- The initiative is part of a long-term vision for 2047, envisioning India as a superpower, with the youth playing a pivotal role.
- It provides aspiring candidates with a wide range of skill courses in areas like healthcare, IT, AI-data science, cloud applications, digital marketing, hospitality, animation, gaming, graphic design, and drone technology.
- It addresses the challenges of meeting the requirements of a highly skilled workforce emerging from paced technological changes.
Strong placement opportunities and the possibility of international mobility are also provided under the scheme.
Previous such initiatives:
- MSDE launched the Credit Guarantee Fund Scheme for Skill Development (CCFSSD) in 2015 to ensure uninterrupted credit flow in the skilling sector and to provide low-income youths with access to affordable finance for specialised skill courses.
This new Model Skill Loan Scheme is the revised version of the same.