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Dr R K Singh, DGM, SIDBIAmit Kumar, Sr Technical Expert , GtZ
New Delhi, India
We Empower MSMEs
Presentation Structure
SIDBI- Empowering Indian MSMEs CLUSTERING AND SIDBI
ApproachMSMEFDP -Key Achievements GTZ : experience and learning Experiential LearningLooking Ahead
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Cluster as Focal point for us - Why Broad convas- MSME Focus- 290 lakh
enterprises, 95% ME, 660 lakh employment, 8000 products
Multiplier benefits- Replication of interventions in other clusters became easier, Harmonisation with other programmes / schemes of other agencies turned simple.
Leverage the strength of clustering –
Through Networks
Lead Nodal Agency of several schemes GOI
Effective Outreach – faster credit delivery , create examples for fellow institutions
DEVELOPMENTAL(A)
FINANCIAL(B)
multi agency , multi program, nation wide
1. Cluster support programs –75 clusters
2. Thrust on unserved/underserved areas – RIP/NER
3. Capacity building
4. Synergy with Support Institutions – UNIDO etc.
5. Skill Development-STUP etc.
Provision of efficient financial services with focus on business goals
1.New Products - Green Loan Scheme
2. New Channels –SEFCs 214 Clusters, WC, BMO route
3.New Tools- CART
Financing & Promotional role to be played simultaneously to enhance competitiveness.
Fostering Green Agenda through international partnerships ( UNIDO, WorldBank, GtZ, DFID, KfW, JICA, AFD, ADB, ) “ Green Loan Scheme”, Green Ratings, MOU with BEE , WB GEF project
MSMEFDP
MSMEFDP and Clustering Making Market Work for MSMEs – Participative and market
driven , Experimenting( internal expert and FA, simultaneous
implementation across clusters with subsectors)
Piloting ( 3 clusters) and Scaling up (16 clusters)
Partnering key players – FMC (UNIDO experience and
expertise) – as Independent reviewer, M&E and Strategic
Inputs
Outreach of the adopted clusters -Some like Knitwear
Ludhiana, leather-Chennai/Kolkata account for more than 80%
of India’s total production output in selected products
Value for Money
GTZ partnership with SIDBI under MSMEFDP
4 Regions
Subsectors of Pharma, Apparel, Engineering,
Leather Toys , Handloom
Financial Services
Business Development Services
BDS Market Development
Objective: Systemic Change Approach:
Developing and Strengthening systems of service delivery; Whole system and framework conditions in which a market for service delivery can develop (supply and demand side measures)
Using BDS to promote responsible competitiveness
Improving BDS Market
Eco Systems
BDS Supplier MSME Units
Lack of awareness
Inappropriate service offerings Because of limited understanding of SMEs
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Non existance coordination amongst Public Service providers
and institutions
Access to information i.e issue of transparency
BMO not ready/competent to engage In service provisioning /facilitation
Cluster driven govt support programmes
Costly offer by estbl SPLow capacity to solve SME prob
Doesn’t value SME as a profitableclient thus don’t take the efforts to
market their services, Inappropriate products ,
limited reach
Lack of knowledge and informationAttitude & willingness to payNo long term planning & vision
Ability and willingness to pay
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BDS Market Eco Systems
Challenges
Enabling MSME Demand for services
Detailed Performance and Need Assessment , www.b-smartonline.com
Information gap between service providers & MSMEs
Focused issue based linkages workshops and tool,
www.consultwho.com
High cost of client acquisition
Consortia of service providers CAPSULE
MSME not convinced with the likely benefits & finds the cost too high
Facilitate demand aggregation & assist with pilot , Breaking the service package into module
Ensuring sustainability
Cost of consumption not supported , capacity development of Lead firms and local training institutes
CAPSULE Consortium of Service Providers for developing and
strengthening whole systems of service delivery Pooling up of resources to minimise the cost of client
acquisition Cross selling /references Advantage MSMEs: access of different services from
single platform Started with 20 Service Providers in Hyderabad Being replicated in other clusters Chennai,Coimbatore,
Tirupur
Overall Competitiv- eness of the units
Inconsistency in
conformance of quality
Too focussed on US and
Europe Mrkt
Availability and Quality of Fabric
Fabric Mills Fabric Processing
Marketing /Sales
Low productivity
Lack of knowledge on Improvement potential and
various tools
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High cost of quality coz of improper quality control system
High labour turnover Lack of skilled workforce
Inefficient supply chain for outsourcing work
e.g fabrication , embroidery
limited usage of ICT, Lack of design capability , Market intelligence input
Access of quality finance
e.g electrical supply, long
transportaion, condition of roads ,ports
Infrastructural Weakness
Apparel Sector NCR: Factors affecting competitiveness
Increasing Awareness
amongst units
GTZ
GTZDocumentation and
publications of findings for knowledge dissemination
GTZLinking Apparel Trade Magazine
GTZ
Performance Assessment & Training Need
Analysis conducted in 10 firms
BDS-provider assist in formu-
lation of Assessment
GTZ
Overall strategy implementation plan for creating awareness on
improvement potentials and process and tools
Facilitation of strategybuilding process
between main players(BMOs, Service
Providers)
Improved awarenessAmongst
participating units and other members
of BMO
Organize sensitization events and short knowledge-
building seminars
Process and Tools for Enhancing Competitiveness
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BMO convinces its members and get their buy in to do a pilot Assessment
Initiate the thinking process and facilitate
consensus
GTZ
Part Financial support and
facilitation
Dissemination of publication amongst all
stakeholders (More than 5000)
Facilitating linkages with AEPC and their support
for publication and knowledge dissemination
ImpactBMO initiated cutting room improvement programme
ImpactSome units have appreciated the
findings and have shown there willingness to
initiate the process
innovative financial models, instruments and services/ products; Capacity Development of SIDBI & partner BanksMicro Enterprise Finance; Development of sector /sub sector specific BDS market development methods, quality assessment and standardization tools;Capacity development (networks, organizations, human resources) of Industry Associations;Policy analysis and advocacy;Sourcing and sharing of International best practices
Next Phase till 2014 with SIDBI
Glimpse of Important initiatives Overall - •Outreach 30000 plus
•International Merit Award by ADFIAP for LED•BDS-outreach over 22000 MSMEs, women 2226 • 400 plus BDSPs services used, mainly in flagship areas ( 22% skill, 14% quality, 12% energy,14% marketing and 5% in finance)
Innovative Tools-
Voucher , BDS clinic , BDS Bazaar , BDS on Wheel, BDS Consortium, MSME Mentor,
Upstream •Ganjam: 2 SHGs wages has increased from Rs 50 to Rs 80 per women. being up-scaled to 14 more SHGs•Ludhiana: 568 unskilled workers get trained which increases their efficiency by 10-15%.
Knowledge Management
• Mother and each cluster website, 2.5 Million hits• Sectoral guidebooks/Posters/do’s and Don’ts ,• CB of FAs (National workshops, learnshops)• CB of BMOs- World SME Expo
Glimpse of Important initiatives
Institutional support-
• BD Centre Alleppey, NAFARI , JFOA,FSIA • Mobile testing Laboratory in Pune • CB through ACF – Green Dhabha, Solution Centre
Skill Development
1. Integrating BMO- Leverage Social Capital• First SD centre – PPP mode, Baseline-BPL-Avg age 22
yrs-tracking, Over 2500 trained, over 90% placements• Replication to 5 more centres in the cluster• Govt. Initiated prog with same agency to train 25000
people 2. 37 Skill Development Centres (12 established, 21 linked
up 4 in pipeline)3. MRIP
Energy Efficiency
Four Dos and Donts/tip sheet/ posters Conducted 108 walk through audits and 25 detailed
audits first Yr. Estimated saving of Rs. 55 mio/year approx captured.
ESMF 110 Credit officers trained
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1. 2500 brass units, employment 2.15 lakh( D+I)
2. JFOA - Viability gap funding
3. CFC setup under PPP mode, Target 3000 MSMEs
4. Till date over 10000 samples of 1050 MSMEs directly benefitted,income Rs 17 lakh
5. Helped JFOA to leverage Govt support amounting to Rs. 17 Lakh
6. Enabled Market corrections
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Cluster Development Programme
1. NAFARI – Testing Lab setup on PPP mode in UNIDO intervention
2. After project intervention Bus.plan/website- turned profit ( loss in 2007, 2008 profit), FY2010 Rev. 47lakh/consl. 20 lakh
3. Extended its services from mere testing lab - Diversified as trainer /knowledge Net worker
4. Emerging as Natural FA in the cluster - Vision
document
HIGH PREMIUM ON EFFECTIVENESS
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1. 900 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 by over by 400%
4. Deptt. of Industries has linked the initiative with their prog.
5. Women got artisan card which facilitates access to credit, market and Health insurance
CREATING VALUE- Waste to Market Taste
Experiential Learning• Cluster Approach Works –
• SIDBI has established edge and example in Greening clusters - 6000 plus MSMEs reached with financing,
• Networks imp- Local, National, Global • Leverage international partnerships• Addressing Enabling Envtt is important – ACF• Customising products and services as per uniqueness of each cluster
• Balanced approach towards financial and non financial needs is crucial
Market led eco system - has inherent sustainability traits
Access to and Quality of BDS enables quick replication
Experiential …. Appropriate Mix of Long Term Intervention with Short
Term support also helps Regular CB of cluster actors as exit vehicle crucial Ownership at each stage important Action Plans to be dynamic, identifying flagship areas for
thrust • Facilitating agencies ( 7 FA & 7 Sub sectors ) have a
tendency to work especially in its area of core competence . Compatibility/ complementarity among facilitators must
• Create Knowledge Networks/Pool to Manage Growth- D3A (Deduce, Document, Disseminate and Assimilate)
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• WB GEF Project with BEE in 5 clusters ( Finance-E.E Linkage) Scaling up equity capital assistance to innovative MSMEs
through risk capital/venture capital products (finance – technology linkage)
Documenting Global best practices for MSMEs (MSME – International environment linkages)
MSME Info Kit ( a complete supporting guide for MSMEs) (MSME environment linkage)
Policy Advocacy to continue.( SIDBI- Government linkage) Taking forward flagship activities under IInd phase of GTZ-
SIDBI under MSMEFDP.
Looking ahead…
THANK YOU
For more details, please contact:-
Project Management DivisionSmall Industries Development Bank of India,
Mail :- [email protected], [email protected], [email protected]
Website : www.msmefdp.net, www.sidbi.in , www.gtz.de
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ClusterNumber of
FirmsType of product
Turnover
(Rs. Cr)Employment
Bhadohi 1820 Carpets - knotted, tufted, shaggy; durries 1480 345000
Panipat 331 Carpets - tufted, shaggy; durries 1010 50000
Dehradun 302 Tablets, capsules, liquid, orals, ointments 3248 18074
Indore 256 Allopathic & ayurvedic formulations 2500 18500
Hyderabad 421 Bulk drugs & formulations 8187 20000
Ludhiana 14000 Knitted wears & grey fabric 5000 400000
Tirupur 2400 Knitwear - cardigans, jersey, nightwear, etc. 11000 408250
Mohali 2410 Engineering cluster 1028 21000
Rajkot 666 Engineering cluster 3000 24700
Rourkella 220 Machining & Fabrication 150 5750
Coimbatore 9704 Pumps and motors and related foundry 2000 129500
Kolkata 4024 Leather, leather goods, hand gloves 4430 62440
Shantiniketan 60 Leather handicraft items 6 1200
Chennai 1150 Leather, footwear, leather and garments 2000 40000
Ganjam 260 Cashew processing and kewda water 240 14650
Ahmedabad 1200 Dye/chemicals & packaging 10150 38000
Pune 550 Fruit & Vegetable Processing Cluster 408 5720
Kanpur 1600 Leather products 2900 100000
Alleppey 950 Coir products 1800 200000
Total 41774 60537 1902784
Macro Data of 19 Clusters Back
Value for MoneyEstimated
FiguresUNIDO (Pharma,
Ahmedabad) (1999-2003)
SIDBI (Pharma, Hyderabad)(2009-11)
Duration 4 years 2.6 years (worked for 15 months)Personnel CDE, TA, PM CDE, SME, NDE, PMAP cost at current prices of the project
Rs. 4.3 million Rs. 2.4 million
No of activities 69 116No of activities for year 1
4 56
Type of activities in year 1
Trust building Trust Building, Quality Up-gradation, Training, Marketing
Output after Year 1
None Energy audit (30 firms), Quality audit (30 firms), Skill development (270), Financial Linkages (2 firms)
No of BDSPs 10 24 (by year 1) Major Outcomes Savings (Rs 50 mn),
Turnover (Rs 18 mn) Quality Up gradation (60 firms)
Estimated as: Energy savings, Quality up-gradation, Pollution reduction, Productivity Improvement
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Courtesy : FMC, New Delhi