Project Background

With intent to facilitate increased flow of credit to MSMEs and support other developmental initiatives, SIDBI is implementing a multi-agency / multi-activity flagship Project on Financing and Development of Small and Medium Enterprises in India. The International bank for Reconstruction and Development (IBRD), Department for International Development (DFID), UK, KfW and GTZ, Germany are the major international partners in the Project.

The Project comprises of a line of credit of USD 120 million from IBRD and Euro 43.5 million from KfW. The Technical Assistance (TA) comprises of GBP 20 million from DFID, UK, EURO 1 million from KfW and Euro 5 million from GTZ. While SIDBI has been assigned with the responsibility of implementing the Project, Banking Division, DEA of the Ministry of finance, GoI is the nodal agency for the same. For implementation of the Project, SIDBI has set up a dedicated Project Management Division (PMD) at New Delhi.
    
tirupurbds.com Project Approach
tirupurbds.com Technical Support Assistance from DFID
tirupurbds.com Business Development Services (BDS) for MSMEs
Business Development Services (BDS) for MSMEs: This is designed to strengthen MSMEs' access to BDS, to facilitate designing & implementing strategies to foster BDS market development, strengthening BDS in select 25-30 SME clusters and develop them as "Role Models", with a strong demonstration effect. It is understood that in clusters there is deficiencies in BDS supply; either BDS services are not appropriate for the type of SMEs or they are not cost-effective, or not ‘packaged’ or delivered in the desired manner.

This type of deficiencies in both demand and supply has to be addressed by either transaction subsidies or specific interventions, like sensitisation, product development and capacity building for BDS providers. The BDS sub-component of the TA package [d] is to be operationalised in 25-30 clusters / sub-sectors
tirupurbds.com Focus of Project
The BDS intervention under the programme shall focus on:

• Building the capacity of existing and potential BDS providers and financial institutions (lead banks) within each of the selected clusters and subsectors to serve the SME market more effectively;

• Facilitating networking between SME business associations and other BDS providers and similar associations in other countries;

• Developing linkage programs between large corporations and MSMEs, working through the major SME business associations;

• Developing high quality, affordable management training for local MSMEs;

• Entrepreneurship training programs to create new entrepreneurs;

• Providing MSMEs with better access to technology, for example, through technology transfer agents/supporting dedicated institutions to facilitate dissemination of information on technology transfer and match-making.
tirupurbds.com Identified Clusters for Implementation of Project
Project has been implemented in following Cluster since FY (2006-07)
Sub sector Clusters
Fruit and vegetable –non tradable Pune, Mysore
Carpet and Floor coverings- Tradable Bhadohi, Panipat, Alleppey
Leather Cluster –Tradable Kanpur, Kolkata, Chennai
15 New clusters selected for the Second Phase of Project are mentioned below:
Sub sector Clusters
Pharmaceuticals Indore, Dehradun, Hyderabad
Knitted Apparel Tirupur, Ludhiana
Engineering Coimbatore, Rajkot, Rourkela, Mohali-Panchkula-Chandigarh
Dyes and chemicals Ahmedabad
Fruits and Vegetables processing Ganjam-Gajpati
Leather Kolkata-Shantiniketan, Chennai
Floor Coverings Bhadohi, Panipat
Among these identified clusters, Apex Cluster Development Services Pvt. Ltd. is working in three clusters, namely Pune Fruit and Vegetable Cluster, Ludhiana Knitted Apparel Cluster and Tirupur Knitted Apparel Cluster.
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