Page 46 - Banking Finance February 2021

ARTICLE

The common architecture of NCGTC has been designed to Guarantee Fund Scheme for Skill Development (CGFSD),
handle multiple guarantee programmes under a single Credit Guarantee Fund Scheme for Factoring (CGFF), Credit
umbrella organization. This is with a view to achieve Guarantee Fund for Micro Units (CGFMU) and Credit
operational efficiencies and economies of scale through Guarantee Fund for Stand Up India (CGFSI). Cumulatively,
sharing of resources such as Technology, premises, these five Trusts have a committed credit guarantee corpus
manpower, risk management solutions and other support of Rs. 13,000 crore.
services. The intent of NCGTC is therefore, to manage
multiple guarantee schemes as part of a larger financial NCGTC Managed Trust Fund
inclusion programme of the government covering different
cross-sections and segments of the economy like students,
micro entrepreneurs, women entrepreneurs, SMEs, skill and
vocational training needs, etc.

The NCGTC Fund Architecture Model:-

1) Credit Guarantee Fund for Skill Development
(CGFSD)
Trustee - Current NCGTC Managed Trust Subject to the provisions of the Scheme, NCGTC undertakes,
Fund:- in relation to Skill Loans ranging from Rs.5000/- to
Rs.1,50,000/- extended to an eligible borrower by a Member
Presently, there are five dedicated credit guarantee Trusts
under the Management of NCGTC viz. Credit Guarantee Lending Institution (MLI) which has entered into the
necessary agreement for this purpose with NCGTC, to
Fund Scheme for Educational Loans (CGFEL), Credit
provide guarantee against default in repayment of skill loans
extended by the lending institutions.Guarantees for Skill
Development Loans by the member banks extended without
collateral or third-party guarantee and the fund has a Target
of 10-20 lakh loans to be guaranteed in a year.

The Fund shall cover skill loans extended by Member Lending
Institution(s) to an eligible borrower on or after entering into
an agreement with NCGTC, without any collateral security
and/or third party guarantee, provided that-

The course is run by Industrial Training Institutes (ITIs),
Polytechnics or in a school recognized by central or State
education Boards or in a college affiliated to recognized

46 | 2021 | FEBRUARY | BANKING FINANCE