Skills for loans in inclusion schemes

Individuals seeking loans under the government's various financial inclusion schemes may have to come prepared with mandatory skills training, a senior government official said. The idea is to ensure that the schemes help build assets and create skilled workers, and do not merely hand out money.

- Subhash Narayan & Rhik Kundu

To enable this, the government plans to use the PM Vishwakarma scheme as a template for other financial inclusion schemes as well, financial services secretary Vivek Joshi said. This will include digital identification; a three-stage selection process for beneficiaries at the village, district and state levels; and upgradation of skills. PM Vishwakarma imparts skills training to beneficiaries and then gives them loans.

"Skill will be an important component of financial inclusion schemes, and if beneficiaries do not upgrade their skills, they will not be entitled to collateral-free soft loans," Joshi said.

An official aware of the development said that to make productive use of the financial support given under social schemes, skill upgrades would be rewarded through capital support to segments and individuals. While this is not being done for all schemes currently, financial support is extended only on evaluation of business proposals from the targeted segments, the official said, requesting anonymity.

Queries sent to the finance ministry on the above issue were unanswered till press time.