On Monday, the Small Industries Development Bank of India (SIDBI) declared its ambitions to encourage cluster development to grow micro, small, and medium enterprises (MSMEs).  The bank propelled a focused vertical for MSME clusters’ centric programs, and a Cluster Development Fund to proffer a push to complex infrastructure support to state governments.

The bank announced it is operating on both interventions viz., complex infrastructure (physical infrastructure) and soft infrastructure (training, skilling, marketing, technology access, design, etc.) “to strengthen clusters to evolve as model clusters and also to increase MSMEs’ access to services, thus raising the value chain.”

Ravindra Kumar Singh, General Manager, and Head — Promotion and Development, SIDBI, reported Financial Express Online, “There are two crucial aspects to a cluster – hard and soft infrastructures. We have set up a Cluster Development Fund with the Reserve Bank of India’s support that will attend to the hard infrastructure side.

We have also launched the Business Development Services Intervention program in five clusters that will attend to the soft side of it, and we think it can impact 20,000-25,000 MSMEs”. The five clusters incorporated the tourism cluster in Jammu & Kashmir, the Delhi-NCR innovation cluster, the Jodhpur wood furniture cluster, Sambalpur textile cluster, and the Chennai leather cluster.

SIDBI has been accumulating the fund for the past few months and has now “started channelizing it after formulating the scheme. The state governments and others have to avail it now,” added Singh. The bank also launched a book titled Diagnostic Mapping of Cluster- Charting the Path ahead through Intervention that complied with diagnostic studies' findings in 30 clusters.

SIDBI bank said the book comprises recommendations and action plans for financial and non-financial matters, arbitrations suggested at the policy, cluster, and unit level. SIDBI is looking to undertake diagnostics of 100 clusters. Further, Singh stated, “We will rope in an agency and that will, based on the diagnostics, do action plan formulation that will have a break of short-term and long-term goals. In discussion with cluster stakeholders, it will formulate an action plan for two-three years”. 

SIDBI announced its Cluster Development Strategy currently catered to more than 600 MSME clusters through its offices and encouraged the entire value chain. “Some of the unique engagements in clusters included EU Switch Asia program in 18 clusters of nine states, cluster outreach programs followed by setting up of Project management Unit (PMU) in 11 states with thrust on clusters and state cooperation, State Rural Livelihood Missions (SRLM), and engagement with One District One Product (ODOP) districts of Uttar Pradesh.”