• UGI USER
  • Jul 26, 2024
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GOVERNMENT REVAMPS SKILL LOAN SCHEME, RAISES LOAN LIMIT

Why in the news?

The government launched a revamped skill loan scheme with an increased loan limit to benefit more students and courses.

source:scribd

About Launch of Revamped Skill Loan Scheme:

  • Government launched a revised skill loan scheme with a new maximum loan limit of Rs 7.5 lakh.
  • Previous limit was Rs 15 lakh; revision announced by Finance Minister Nirmala Sitharaman.
  • Scheme aims to benefit 25,000 students annually.

Improvements and Lending Framework:

  • Launched in 2015, the old scheme had low uptake due to high loan limit and course fees.
  • Revised scheme includes loans from NBFCs, NBFC-MFs, and small finance banks.
  • Expanded to cover more skill courses, including those on Skill India Digital Hub, not just NSQF-aligned courses.
About Skill Loan Scheme:

  • Introduced: July 2015 for skill development courses.
  • Eligibility: Indian nationals in recognized ITIs, Polytechnics, schools, colleges, NSDC training partners.
  • Age Restriction: None.
  • Courses: NSQF-aligned.
  • Finance: Rs. 5,000-7.5 lakh.
  • Moratorium: Course duration.
  • Repayment:
  • Up to Rs. 50,000: 3 years.
  • Rs. 50,000-1 lakh: 5 years.
  • Above Rs. 1 lakh: 7 years.
  • Coverage: Course fees, assessment, study materials.
  • Interest Rate: Max 1.5% p.a. above RLLR or other benchmarks.
  • Collateral: None.
  • Credit Guarantee: CGFSSD by NCGTC, 75% cover, max fee 0.5%.