Model Skill Development Loan Scheme

In Short:

• What is Model Skill Development Loan Scheme
  • Significance
  • Covered Training Institutes
  • Relevance
• Prerequisites
• Specifics
  • Courses
  • Course Duration
  • Loan Amount
  • Moratorium
• Time Frame for Repayment
• In terms of finances
  • Security
• Guarantee of loans
  • Terms and Conditions of the Guarantee

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What is Model Skill Development Loan Scheme

A government program called the Model Skill Development Loan Scheme offers financial support to youth so they may enroll in skill-development programs.

• Significance: Model Skill Development Loan Scheme Offers financial assistance to students participating in skill-building programs that are in line with Qualification Packs and National Occupations Standards.

• Covered Training Institutes: Institutions offering certificates, diplomas, or degrees must follow the National Skill Qualification Framework (NSQF) when executing the courses they offer.

• Relevance: Accessible via all Indian Banks’ Association (IBA) member banks.

Include more financial institutions and banks as proposed by the Reserve Bank of India (RBI).

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Model Skill Development Loan Scheme | Prerequisites

• Any citizen of India who has been accepted into courses provided by Polytechnics, Industrial Training Institutes (ITIs), Central or State Education Board-approved schools, colleges affiliated with recognized universities, and training partners associated to the State Skill Mission, Sector Skill Councils, National Skill Development Corporation (NSDC), or State Skill Corporation.

• No age limitations

Model Skill Development Loan | Specifics

• Courses: Need to be in line with NSQF.

• Course Duration: There is no minimum requirement for the course duration.

• Loan Amount: The loan amount, which was recently raised to Rs. 7.5 lakh, ranges from Rs. 5,000 to Rs. 1,50,000.

• Moratorium: Equal to the length of the course

Model Skill Development Loan Scheme | Time Frame for Repayment

• Up to Rs. 50,000 in loans: for a maximum of three years.

• Loan amounts ranging from Rs. 50,000 to Rs. 1 lakh: for a maximum of five years.

• Loans over one lakh rupees: up to seven years

Model Skill Development Loan Scheme | In terms of finances

The scope of coverage is Contains study materials, course fees, assessments, and test costs, among other things.
The annual interest rate cannot be more than 1.5% over the repo-linked lending rate (RLLR) or any other external benchmark interest rate that has been approved by the RBI.

• Security: No need for security

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Model Skill Development Loan Scheme |Guarantee of loans

In November 2015 the Credit Guarantee Fund for Skill Development (CGFSSD) was officially established by the Ministry of Skill Development and Entrepreneurship (MSDE).

The National Credit Guarantee Trust Company (NCGTC) is in charge of administration.

• Terms and Conditions of the Guarantee: Banks may request a credit guarantee for protection against defaults. For a little cost that doesn’t exceed 0.5% of the outstanding balance, NCGTC offers the guarantee.
  Up to 75% of the outstanding loan balance, including interest, is covered by the guarantee.

Official Web Site : Ministry of Skill Development and Entrepreneurship