The Borg use genetic engineering--the nanoprobes' assimilation process rewrites victims' DNA to match Borg genetic patterns.
As for cloning, maybe the Borg see the same problem with replicative fading. While they do seemingly clone the Queen, perhaps they find it more efficient to simply plunder the galaxy of available resources -- fresh bodies instead of expending the energy to clone. Finally, assimilation offers the benefits of new individual knowledge and cultures...something that a clone cannot do. A clone is more of the same.