1 presentation on bds led cluster development in poverty intensive clusters february 21, 2014...
TRANSCRIPT
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Presentation on
BDS Led Cluster Development inPoverty Intensive Clusters
February 21, 2014
Addressing Gaps in MSME Eco-system
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Set up under an Act of Parliament - April 1990
Promotion, financing and development of MSMEs and Co-ordinate
the functions of institutions serving the sector
Presence – serving 600 MSME clusters with its 85 branch offices and
indirect support through network of more than 80,000 branches of
banks/FIs/MFIs for on-lending to MSMEs
Cumulative financial support of about USD 51.63 billion, resulting in
benefiting the MSME sector through more than 32 million loans.
Total assets : USD 900 million (Gross NPA of only 0.98%)
SIDBI – An IntroductionSIDBI – An Introduction
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Snapshot of Indian MSMEsSnapshot of Indian MSMEs
A vehicle for Faster, Sustainable and more Inclusive Growth. Platform for Entrepreneurship Development > 31 million enterprises, > 6,000 products > 100 million employment - 2nd largest after agriculture Contributes 45% of manufacturing 43% of exports 8% share of GDP Registered around 13% growth during 11th Five Year plan against
overall economic growth 6.5%
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Challenges :Gaps in MSME Eco system Challenges :Gaps in MSME Eco system
Financial Gaps Adequate, timely and cost effective credit Access to equity / risk capital & financing innovation Financing support for sustainable measures, financing knowledge based / intangible
rich projects in service sector, marketing & brand building, etc.
Non Financing gaps Infrastructure adequacy Marketing – procurement of raw material, designing, product development, etc. Lack of quality and affordable advisory services Skill development – lack of managerial competence and proper skill set Technology upgradation Information dissemination Timely access of Business Development Services (BDS)
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Defining ClusterDefining Cluster
"A cluster is a sectoral and geographical concentration of similar, related or complementary micro, small and medium enterprises that share common facilities, that derive common benefits of economies of scale and scope, and that are faced with common threats".
In India, around 650 SME clusters and 6000 artisans clusters exist.
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Needs of a ClusterNeeds of a Cluster
Credit needs Financial requirement of MSMEs in a cluster
Common needs Testing Centres R&D Centres Product & Process development centres Tool rooms
Infrastructure needs Roads Sewerage Water sanitation Power supply Industrial sheds Developed information and networking system Common marketing platform
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Viability: Makes the units competitive, enhances market competitiveness.
Subsidiarity: Enhances value addition, economies of scale and scope for strong forward & backward linkages.
Risk Mitigation: Facilitates Banks / FIs to offer credit in a targeted fashion with greater assurance of repayments.
Complimentarity: Synergy with other programmes by other agencies, yielding maximum benefits.
Replicability: Intervention in similar other clusters become smooth and quick yielding.
Significance to Regional/National Economy: Boosts regional industrial growth and in turn national growth through more efficient use of raw material, power, increase in productivity leading to increase in income.
Cluster Intervention – AdvantagesCluster Intervention – Advantages
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GoI InterventionsGoI Interventions
GoI is supporting cluster development through various schemes viz. MSE-CDP
Subsidy available upto 25 lakh for soft intervention.Subsidy up to 90% (on project cost of 15 crore) for establishing
Common Facility Centre in clusters.Subsidy up to 80% (on project cost of 10 crore) for infrastructure
projects.Integrated Handloom Development Scheme - for providing
financial assistance for holistic development of Weavers’ clusters.Scheme of Fund for Regeneration of Traditional Industries
(SFURTI) – Integrated cluster based development of traditional industries in Khadi Village and Coir Sectors.
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SIDBI’s Cluster InterventionSIDBI’s Cluster Intervention
SIDBI adopts ‘Credit Plus’ approach and Cluster based interventions are an integral part of SIDBI’s developmental initiatives. SIDBI has so far supported :
75 clusters in the area of EE financing and promotion70 clusters in association with MoMSME and BEE75 clusters in the area of skill upgradation / marketing linkages19 clusters under MSME-FDP by promoting BDS in the area of
new technology, skill upgradation , EE and marketing.5 foundry clusters under WB-GEF project.120 rural and districts clusters through Rural Industries
Programme (RIP) promoting more than 38000 enterprises and employment generation of 1.10 lakh persons.
300 Credit Advisory Centers in as many clusters in partnership with cluster level industry associations.
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SIDBI’s other initiativesSIDBI’s other initiatives
Facilitating greater flow of credit to clusters
Scheme for Small Enterprises Financial Centres (SEFC): SIDBI has entered into Memorandum of Understanding (MoU) with 15 commercial banks covering over 200 clusters for Joint / co-financing of projects including working capital and non-fund based facilities for the MSME sector.
To augment credit flow to SMEs by way of fair pricing and removing informational asymmetry through SMERA rating. SMERA has entered into MoUs with 30 banks and institutions. SMERA has also completed risk profiling of 8 clusters.
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MSMEFDP-Project CoverageMSMEFDP-Project Coverage
7 subsectors- 7 FAs- 19 clusters, over 100 professionals
Over 42000 Principal MSMEs
Cumulative turnover of over INR 620 billion
Direct / indirect employment to over 2 million people
Project Objectives
Comparative advantage to competitive advantage
Downscale to upscale -ME development
Judicious Blending of financial and Non financial services
Promoting eco system- CB of institutions, BDS, PA, Network
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Business Development ServicesBusiness Development Services
Business Development services are wide range of Services used by
entrepreneurs to help them operate efficiently and grow their businesses.
It includes training consultancy & advisory services, marketing assistance,
information, technology development and transfer, and business link
promotion as also financial services.
By fostering Business Development Services (BDS) in 19 clusters SIDBI targeted
at soft infrastructure with both long term and short term intervention.
These 19 clusters have over 42,000 Principal MSMEs with cumulative turnover
of over INR 620 billion.
Direct / Indirect employment to over 20 lakh people
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Competition in Service Delivery
results in
attractsleads to
reinforces
High Quality Product Offering
Good Income Opportunities
Growth and Innovation
Profits
Excellent Business Services
MSMEs BDS Providers
WealthCreation
SharedObjectiveBDS Market
leads to results in
reinforces increases
The fostering of a skilled and entrepreneurial BDS sector will lead to a self-supporting loop of improved innovation and competitiveness in MSMEs.
Making Market for MSMEsMaking Market for MSMEs
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Methodology of Cluster DevelopmentMethodology of Cluster Development
Selection of a Cluster
Selection of a Cluster Development Agency
Intervention Diagnostic study of cluster
Trust building / strategic MoUs
Preparation of action plan (AP) for intervention
AP implementation
Exit / hand over after making it self sustainable.
Monitoring and evaluation
Impact assessment / dissemination / replication
2020
1. 1000 Women Engaged in making Whips out of scrap earning R 10-15 p/d
2. Helped in product introductions, new design development, skill upgradation, marketing linkages
3. Income increased R 100-125 p/d
4. Deptt of Industries has linked the initiative with their prog.
5. 37 Women got artisan card which facilitates access to credit, market and Health insurance
CREATING VALUE- Waste to Market Taste
Success Stories of BDS interventionSuccess Stories of BDS intervention
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Before Intervention After Intervention
98% women in spinning. Two women had to walk 10-12 kms per day on hand driven equipments . Income was Rs
80-90 per day with production of 8-10 kg / day
Technical BDS roped-in introduction mechanized machines. Person can sit. Produce 17 Kg/day. M/c cost has been
reduced with R&D from Rs 85000 to Rs 45000.
EXIM Bank
Coir Board
Other Banks
Success Stories of BDS interventionSuccess Stories of BDS intervention