The Ministry of Skill Development and Entrepreneurship (MSDE) has launched a revised Model Skill Loan Scheme. This new initiative aims to break financial barriers for students seeking advanced skill courses, ensuring access to high-quality education without financial constraints.
The loan will provide better access to advanced-level skill courses, overcoming financial barriers to many aspiring students in acquiring futuristic and in-demand industry skills. By enhancing loan accessibility, the scheme empowers India’s youth to build a future-ready workforce.
Key Changes in the Revised Model Skill Loan Scheme:
- Expanded Lender Eligibility: Non-Banking Financial Companies (NBFCs), Micro Finance Institutions (MFIs), and Small Finance Banks are now eligible to extend loans.
- Increased Credit Guarantee Cover: Loans disbursed will be backed by a guarantee against default up to 75% of the loan amount.
- Higher Loan Limit: The maximum loan amount eligible for credit guarantee cover has been increased from INR 1.50 lakhs to INR 7.50 lakhs.
The launch event was attended by Secretary, MSDE Shri Atul Kumar Tiwari; AICTE Chairman Shri T.G. Sitharam; Senior Economic Advisor, MSDE Shri Nilambuj Sharan; CEO, NSDC Shri Ved Mani Tiwari; Chairman, NCGTC Shri Durgesh Pandey; Deputy CEO, Indian Banks Association Shri Gopal Bhagat; and CEO, Eduvanz Financial Services Shri Varun Chopra.
During the launch, Shri Jayant Chaudhary emphasized the scheme’s significance. He highlighted its role in providing collateral-free loans up to Rs. 7.5 lakhs and acknowledged the inclusion of new lending institutions. “As India undergoes rapid technological and societal shifts, our education and job markets must evolve,” he said. “This Model Skill Loan Scheme is a reform and liberalisation that addresses public demand and aligns with our strategic vision for 2047.”
Click Here to Read on A Guide to Organizations Offering Loans Under the Skill Loan Scheme
Shri Atul Kumar Tiwari, Secretary, MSDE, underscored the importance of integrating new-age learning into the skill development ecosystem.
He noted that this scheme provides opportunities in India and global mobility for a range of skill courses in sectors such as
- Healthcare
- IT
- AI-Data Science
- Cloud Application
- Digital Marketing
- Hospitality
- Animation
- Gaming
- Graphic Designing
- Drone Technology and more
“This initiative will help candidates from urban and semi-urban areas access affordable finance for specialized training, enhancing their placement opportunities and potential for international mobility,” he added.
The new Model Skill Loan Scheme builds upon the Credit Guarantee Fund Scheme for Skill Development (CCFSSD), launched in 2015, addressing the challenges of financing high-skill training amidst rapid technological advancements.
