- The revamped Model Skill Loan Scheme increased the eligible loan size for high-end skilling courses to ₹7.5 lakh from ₹1.5 lakh.
- The earlier Credit Guarantee Fund Scheme for Skill Development, notified in November 2015, faced multiple challenges.
- The low utilisation was attributed to the low loan limit of ₹1.5 lakh, inadequate for high-cost courses due to inflation.
- The new scheme addresses issues by lending networks beyond Indian Banking Association (IBA) banks to include Non-Banking Financial Companies (NBFCs) and small finance banks.
- This broader network aims to improve access to more skill courses and increase the uptake of loans by both private and public sector banks.
Dig Deeper: Read about PM Kaushal Vikas Yojana and recently proposed changes.
