Loan for Skill Development for Poor and Backward Classes
Government of India launched the Skill Loan Scheme on July 15, 2015 to provide loan facility to aspirants wanting to do skill development courses aligned to National Skill Qualification Framework (NSQF). The important features of the Scheme, inter-alia, are as follows:
- Any Indian National who has secured admission in a course run by Industrial Training Institutes (ITIs), Polytechnics or in a school recognised by Central or State education Boards or in a college affiliated to recognised university, training partners affiliated to National Skill Development Corporation (NSDC) Sector Skill Councils, State Skill Mission, State Skill Corporation can avail loan for the purpose.
- No processing fee is charged by Banks.
- Amount of loan ranges from Rs. 5,000 to Rs.150, 000/- depending on the course; and is having a repayment period of 3 to 7 years.
- Simple rate of interest @ 11% and 12% per annum is charged during the period of study.
- No minimum course duration.
- No specific restriction with regard to age.
- Risk of banks covered through Credit Guarantee Fund Scheme for Skill Development (CGFSSD)
- Under the scheme of CGFSSD, interest rate to be charged by Member Lending Institution (MLI) should not be more than 1.5% per annum over Base Rate.
- Borrower must enter into an agreement with National Credit Guarantee Trustee Company (NCGTC) for providing guarantee against default in repayment of the loan extended by lending institutions.
- The fund shall provide guarantee cover to the extent of 75% of the amount in default.
- The loan is sanctioned without any collateral security or third party guarantee.
This information was given by the Minister of State for Skill Development and Entrepreneurship Shri R.K. Singh in a written reply in the Lok Sabha today.