Credit and Finance for MSMEs: Two weeks just after the principal monetary institution for MSME financing and development — SIDBI announced its Cluster Development Fund to give a thrust to really hard infrastructure assistance to state governments for MSME cluster development, it has offered the initially approval below the fund starting with the Tamil Nadu government. According to SIDBI, the project-certain “moderately priced loan assistance” below the fund will be extended to the state government for upgrading several current MSME clusters and for building new industrial infrastructural facilities in the state. However, SIDBI didn’t disclose the loan quantity and tenure.
“The thrust shall be laid on clusters in sectors/subsectors which can directly benefit the MSMEs in the state and to bring them to a level ‘NEXT’ wherein they emerge vibrant, higher on the value chain and become sustainable. SIDBI shall complement these with its customized direct lending products being channelized in the supported clusters,” Sivasubramanian Ramann, IA&AS, Chairman and Managing Director, SIDBI stated in a statement. He added that the bank shall also examine supporting the soft infrastructure troubles in choose clusters. The troubles could be relating to technologies, skilling/upskilling, power efficiency, market place, and credit. Ramann stated a pilot has been launched for the exact same in the Ambattur leather cluster.
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“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 of a cluster. We have also launched the Business Development Services Intervention programme in five clusters that will attend to the soft side of it and we think it can impact 20,000-25,000 MSMEs,” Ravindra Kumar Singh, General Manager and Head — Promotion and Development, SIDBI had told TheSpuzz Online. Apart from the Ambattur cluster in Chennai, the other 4 clusters have been tourism cluster in Jammu & Kashmir, Delhi-NCR innovation cluster Jodhpur wood furnishings cluster, and Sambalpur textile cluster.
The professional committee on MSMEs headed by U.K. Sinha in its June 2019 report had suggested SIDBI the use of Priority Sector Shortfall (PSS) funds to build a low-expense lending window for state governments for infrastructure projects in clusters, civil performs for rehabilitation of current industrial estates and setting up of new industrial estates. SIDBI has so far setup Project Management Units (PMUs) in 11 states namely, Assam, Andhra Pradesh, Rajasthan, Gujrat, Haryana, Maharashtra, Delhi, Uttar Pradesh, Uttarakhand, and Tamil Nadu. “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 clusters stakeholders, it will formulate an action plan for two-three years,” Singh had stated.