MSME Financing and Development Project (SMEFDP)

Introduction

To enhance the competitiveness of Micro, Small and Medium Scale Enterprises

(MSMEs) in India, the Government of India is implementing World Bank led multi
agency/ multi activity project for Financing and Development of Small and
Medium Scale Enterprises under the aegis of Ministry of Finance.

Objective

Objectives of the overall project are

(a) To strengthen growth and competitiveness of Micro, Small and Medium

Enterprises (MSMEs)

(b) To make paradigm shift in the banking sector’s approach towards

providing credit and financial services to MSMEs

(c) To improve MSMEs access to market oriented financial and business

development services , thereby fostering MSME growth, competitiveness
and employment creation

Partner Institutions

International Bank for Reconstruction and Development (World Bank) is leading

the project initiatives in association with international organizations viz. KfW
Germany, Department for International Development (DFID), UK and German
Technical Cooperation (GTZ)

Implementation

Small Industries Bank of India (SIDBI) is the implementing agency and Ministry of
Finance, Government of India is the nodal agency for the project.

The project is being implemented in select 25 MSME clusters to develop them as

“Role Models” with strong demonstration effect.

Apex Cluster Development Services Pvt. Ltd. is the consultant appointed to

implement the project at the grass root level for the garment clusters at Tirupur
and Ludhiana.

Approach

Approach of the MSMEFD Project is to foster the services of Business

Development Service (BDS) Providers in the identified areas of weaknesses of
the MSMEs in the cluster to make them competitive.

The project has already been implemented in Kanpur- leather cluster, Fruit and
Vegetable Processing cluster, Pune and Coir Cluster Alleppey in the first phase.
Tirupur Knitwear Cluster is one of the clusters identified for implementation of
the project in the second phase.

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Diagnostic Study

To understand the problems and issues which MSMEs in Tirupur Knitwear Cluster
are facing, a study was undertaken by meeting 75 firms across the value chain
right from knitters to exporters and other service providers like inspection and
testing agencies, logistic providers, bankers, buying houses and technical
institutions in the cluster.

Outcome of the Study

Recession has affected the industry very much. The industry is unable to face
the competition on account of price. Stringent quality norms of buyers,
insistence to follow various standards, delayed delivery schedules are affecting
the industry very much.

Reasons for such problems have been identified on the following broad area

1. Inadequate Human Resource (HR) Skills both at shop floor level and at middle
level manager.
2. Attitude of the workforce and their behavior at workplace.

3. Gap in the communication at inter firm and inter departmental level, due to
absence of proper system for co ordination.
4. Absence of system to improve productivity, quality and to minimise waste.

5. Lack of closer industry- institutional collaboration.

6. Non adoption of information and communication technology (ICT) to improve

organizational efficiency.
7. Inability to diversify the product range and develop own design. During the
interview, members from the industry felt the need for.

8. Promotion of Common (Brand) label to overcome the increasing insistence of

adoption of standard by various buyers for the same objective.

9. Promotion of Common Facility Centres (CFC) and Training Centres for textile/
garment printing units and Designing Centre in the cluster

Since the cluster is working in the international environment, it has been felt that
members in the industry should be informed about the developments that are
taking place in areas of Intellectual Property Rights (IPR), Environment and
Energy Conservation and its impact to the industry to make them prepared to
face the challenges on those areas.

Action Plan

Activities have been proposed to overcome the problems; the cluster is facing on
the above areas. Thrust has been given to four important areas (a) Developing
HR Skills (b) Improving the organizational efficiency by introducing systems to
improve productivity, quality and delivery (c)Introducing system in the
organization and reduce the overhead through increased adoption of
information and communication technology (ICT) (d) Promotion of closer
industry- institutional cooperation, during the first year.
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Activities relating to (a) Product diversification and development of designs (b)
Raising awareness on Energy Conservation, environment and intellectual
property rights (c) promotion of Common (brand) label (d) promotion of Common
facility Centre (CFC) and training centre for members of TEKPA are proposed to
be taken in the second year, while continuing the activities undertaken in the
first year for wide spread adoption of systems by large number of firms in the
cluster.

Strategy

1. Improving attitude and skill of shop floor employees

(a) Making documentary to change the attitude towards work.

(b) Identifying the skill gap and providing training at the shop floor itself.

(c) Wide spreading the adoption by other firms by mobilizing support from
other government schemes.

2. Improving the skill of Middle Level managers

(a) Closer coordination with NIFT- TEA Knitwear Fashion Institute to upgrade
the capacity of the faculties and the students.

(b) Creation of “Knowledge Network” to continuously share the knowledge

among the members and to upgrade the skill of the middle level managers
already working in the industry.

(c) Organizing short term/ refresher courses in technical and management

related subject.

(d) Providing support to the faculties to undertake project from the industry

3. Support for entrepreneurs

(a) Promotion of “ Think Tank” among the members of the industry

(b) Designing and organizing training programmes/ short term courses in

technical and management related subjects

(c) Providing training to adopt ICT to support their decision making skill

4. Improving the Competitiveness of MSMEs in the cluster

(a) Demonstration of adoption of technology and system; by identifying,

promoting and supporting Business Development Service (BDS) Providers to
implement ‘pilots’ to improve productivity, quality and minimize waste.
(b) Empowering NIFT-TEA Faculties to take up live projects from the industry

(c) Training for the middle level managers to adopt Lean Manufacturing, Six
Sigma , SQC & OR Techniques

5. Support for increased adoption of Information & Communication

Technology (ICT)

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 (a) Intensive support to TEA- E RC to design and implement all the training
programmes mentioned in the earlier areas for middle level managers and
entrepreneurs.
(b) Support for introduction of “Resource Exchange’ in the TEA Portal and
search optimization.

(c) Promotion of cooperation among various industrial associations and TEA –

ERC for development of business of their members.

(c) Validation of data available with the industrial associations for reliability.

(d) Sensitizing the members of industrial associations the means of

adopting ICT to solve their day today business problems.

(e) Support SPV for the promotion of ICT to introduce uniform ERP system in
the industry.

6. Support for improving the capability for Product Diversification and

Fashion Designing

(a) Support for ‘Resource Centre’ for providing information relating to

different type of fibers, yarn and fabrics.

(b) Support for ‘Tif-f-lab’ and NIFT-TEA Knitwear Fashion Institute for getting
fashion trends from other fashion centres like Milan, Paris, New York.

(c ) Establishing linkages with established fashion design schools / designers.

(d) Undertaking study for ‘fabric engineering’.

(e) Raising awareness among the members about the need for developing
own design.

7. Introduction of Business Development Service (BDS) Providers for

Energy conservation, Intellectual Property Rights (IPR) and
Environment Protection

(a) Organizing workshops/ seminars to raise awareness among the members

and its impact to the industry.

(b) Introducing ‘Pilots’ in selected firms for demonstration of effectiveness.

(c) Collaboration with other programmes for wide spread adoption of the
concept.

(f) Building capacity of BDS providers to undertake the projects

independently for replication in other firms.

8. Promotion of Common Facility Centre and Training centre for fabric

printing

(a) Closer coordination with members of TEKPA for the promotion.

(b) Support for preparing the ‘Project Report ‘for getting financial support
from appropriate scheme of the Government.
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 (c ) Establishing necessary linkages with other technical institutions.

(g) Extending necessary initial guidance for conducting training programmes.

9. Promotion of Common (Brand) label

(a) Identifying members who are interested in the renewed interest of the
initiatives.

(b) Extending support for the preparation of ‘Road Map’ and ‘Project Report’.

(c ) Coordination for submission of report for getting financial support from

appropriate scheme of the Government.

Outcome

It is aimed to achieve the ‘vision’ of ‘improving the market share of the cluster,
by empowering it to overcome the issues it is facing at present, in the areas of
production, quality, delivery, human resources skills, and design and product
development; by empowering local institutions, establishing strong industry-
institutional linkages and though increased adoption of Business Development
Services at the end of implementation of the project.

Support offered in Financial Year 2010-11

Under MSME financial & development project, support is provided for training the
human resource in various management and industrial principles. The
developmental activities provided at all three level viz.

1. Owners / Entrepreneurs
2. Managers and Supervisors
3. Shop floor employees and labourers

For leveraging the activities, a forum named entrepreneurs’ club is formed to

provide financial support through various government scheme. Also for
continuous development, a knowledge network is formed for the managers and
is named as Progressive Managers’ Forum. We also guide the members of these
forums to avail credit facilities for industrial purposes.

The forms for registration for all these schemes are provided and hence we
request you to kindly register for the same free of cost.

For further details please contact the undersigned.

Mr. Shabeer Ahammed K. M.

Cluster Development Manager
Apex Cluster Development Services Pvt. Ltd.
T-21, Topaz - A Block, Prime Enclave, Opp. SAP Theatre,
Avinashi Road, Tirupur - 641 602.
Mob : +91 - 8122 904 602

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Office : +91 - 421 – 2470326
E-Mail : shabeer@tirupurbds.com

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