Foundation for MSME Clusters

Cluster Development and Poverty Alleviation

Foundation for MSME Clusters

Types of clusters involved

• Handicrafts and Handlooms

• Rural cluster

• Other micro enterprise clusters

• Agro based clusters

• Clusters in the making in the above

areas

Foundation for MSME Clusters

Impact on Selection Criteria and Diagnostic Study

1. Selection process to give more weightage to

• Presence of stakeholders below poverty level

• Highly labour intensive production

• Presence of women in labour force/entrepreneuship

• Presence of vulnerable/minority community

2. Diagnostic study to include Participatory Appraisal to

help the poor speak

Foundation for MSME Clusters

Impact on Implementation

• To be coordinated by a highly capacitated individual/

organization

• In a sequenced approach based on the fulcrum activity,

which is generally market linkage

• Training largely through business linkages

• Simultaneously put system in place

• Continuous handholding and dispute resolution

• Start with the not so poor and then move to the poorest

• Include activities beyond economic issues – gender,

health, education: empowerment

• Critical role of value chain partner – sustainability angle

Foundation for MSME Clusters

Monitoring and EvaluationGeneral Cluster Programme

Poverty Alleviation Programme

New market created Increased income of the poorest

Enhanced export Enhanced turnover of the poorest

New product range Enhanced capability of the poorest

Enhanced investment Enhanced wages

Women empowerment

Foundation for MSME Clusters

Specialized Issues

• Takes its time – 3 to 5 years for impact

• Organic evolution needs flexibility in resource usage and

time lines, quick fixes can ruin empowerment issues and

thus often need patience

• Percentage support fund required is much higher as

compared to normal cluster programme

• Ensure that marginal groups are not losers in this growth

process

• Higher time investment in creation of interest group and

their sustainability