Historically, Indian banks have been reluctant lenders to students. For one, students often have little by way of collateral to mitigate banks’ risks; for another, they have never been an important section politically to qualify for loan melas.
This is about to change. As reported in Mint today, the Indian Banks’ Association has approved a loan scheme for vocational education that will not require any collateral and won’t have any age bar on those who seek such loans.
Such schemes are important if India is to reap growth advantages inherent in the so-called “demographic dividend” that it enjoys.
At the moment, the mismatch between skills required in various industries and the persons available on the job market is glaring. And unless credit and other inputs, including quality education opportunities, are made available, this potential is likely to go waste.