Benefits of Performance Credit Rating In MSME Industry | SupportBiz

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Benefits of Performance Credit Rating In MSME Industry

 
Over 1,05,000 enterprises took benefit of performance credit rating and became 'A' rated and verified company
The small scale sector occupies an important position in any developing economy the world over. Fast changing global economic scenario has thrown up many opportunities and challenges to the small scale industries in India. While, on the one hand, many opportunities have opened up for the small scale sector to enhance productivity and look for new markets in other countries, it has also put an obligation on them to upgrade their competence in terms of technology, management & financial strength to successfully meet the global competition.

Over 105000 enterprises took benefit of Performance credit Rating  and become 'A' rated and Verified company.Ministry of MSME through NSIC assists  to become a trusted verified supplier by way of evaluating Performance Credit Rating (PCR) by internationally renowned rating agencies like CARE , CRISIL ,FITCH ,ICRA , ONICRA , SMERA , Dun & Bradstreet (D&B) (Empanelment of D&B under this scheme was valid upto 31.03.2009. Thereafter rating is being done by SMERA as "NSIC-D&B-SMERA Rating") and BRICKWORK RATINGS (BWR)
PCR scheme for MSMEs has been formulated in consultation with Indian Banks’ Association (IBA) and Rating Agencies. NSIC has been appointed the nodal agency for implementation of this scheme through empanelled agencies.

There is a need to create awareness amongst Small-Scale Units about the strengths and weaknesses of their existing operations and to provide them an opportunity to enhance their organizational strengths.
 
As a step in this direction, the government felt the need  for introducing a Rating Scheme for the Small Scale Industries. It is expected that the Rating Scheme will encourage SSI sector in improving its contribution to the economy by way of increasing their productivity, since a good rating would enhance their acceptability in the market and also make access to credit quicker and cheaper and thus help in economizing the cost of credit. Besides, the rating would also infuse a sense of confidence amongst the buyers for taking a decision on the options of sourcing material from Small Scale Units.
 
Benefits of Performance & Credit Rating
• An independent, trusted third party opinion on capabilities and credit-worthiness of MSMEs.
• Availability of credit at attractive interest.
• Recognition in global trade.
• Prompt sanctions of Credit from Banks and Financial Institutions.
• Subsidized rating fee structure for MSMEs.
• Facilitate vendors/buyers in capability and capacity assessment of MSMEs.
• Enable MSMEs to ascertain the strengths and weaknesses of their existing operations and take corrective measures.
 
Benefits to Banks & Financial Institutions
Availability of an independent evaluation of the strength and weaknesses of an MSME unit seeking credit and thereby enabling banks and financial institutions manage their credit risk.
 
Salient Features
• A combination of credit and performance factors including operations, finance, business and management risk.
• Uniform Rating Scale for all empanelled rating agencies.
• MSME have the liberty to choose among the empanelled Rating Agencies.
• Turn-Over based Fee structure.
• Partial Reimbursement of Rating Fee through NSIC. 
 
Performance & Credit Rating Fee
Reimbursement of Performance & Rating Fee
Turn Over of SSI Reimbursement of Fee through NSIC 
Upto Rs 50 Lacs 75% of the fee or Rs 25000
Above Rs 50 to 200 lacs 75% of the fee or Rs 30000
More than Rs 200 lacs 75% of the fee or Rs 40000