What’s in the news?

• The Ministry of Skill Development and Entrepreneurship (MSDE) has launched the revised model skill loan scheme aimed at providing access to skilling courses. 
• The scheme empowers youth with financial support for advanced skilling through the instrument of collateral-free loans. The move is expected to benefit 25,000 students every year.
• The courses also include high-end courses that often come with high course fees, without any financial constraints.
• The earlier Credit Guarantee Fund Scheme for Skill Development, notified in 2015 to create a credit guarantee fund for courses aligned to the National Skill Qualification Framework, faced multiple challenges. 
• The revised scheme will facilitate loans up to Rs 750,000 compared to Rs 150,000 earlier, and it will cover courses other than those aligned to the National Skill Qualifications Framework, provided the courses are available on the Skill India Digital Hub.

Low fund utilisation

• As on March 31, 2024, loans amounting to ₹115.75 crore had been extended to just 10,077 borrowers. The low fund utilisation under the scheme over the past decade under the scheme was due to low ticket size of loans (upto ₹1.5 lakh), even as course costs and fees rose due to inflation, leaving many high-cost courses out of the scheme. 
• The new credit guarantee scheme has now also been extended to non-banking financial companies, micro finance institutions, and small finance banks.
• Aspiring candidates can now choose from a plethora of skill courses in sectors, such as health care, information technology, artificial intelligence (AI), data science, Cloud application, digital marketing, hospitality, animation, gaming, graphic designing, and drone technology. 

https://www.business-standard.com/finance/news/skill-ministry-launches-revised-loan-scheme-up-to-rs-750k-per-student-124072501439_1.html