Micro, Small and Medium enterprises (MSMEs) comprise a pivotal sector of the Indian economy, employing the largest work force among all sectors other than agriculture, promoting entrepreneurship, and contributing significantly to economic growth. However, even as its importance is widely acknowledged, the MSME sector has historically found itself deprived of timely and adequate institutional finance. The primary reason for this has been the lack of credible information on the functioning and performance of the MSME sector. One way to bridge this “information gap” and thereby improve the sector’s access to institutional finance is to encourage MSMEs obtain credit ratings from credible credit rating agencies.
, an ICRA MSME Rating would:
For the rated MSME
- Provide an objective, independent and reliable opinion on credit quality.
Serve as an additional input in the credit decision making process.
Assist in risk pricing and capital allocation.
Facilitate portfolio management and monitoring.
, an ICRA MSME Rating may help to:
Improve the comfort level with prospective/existing lenders.
Negotiate better terms on the basis of the credit quality reflected by the Rating.
Reduce the time involved in obtaining loan approvals.
Project a better image to prospective/existing trade partners.
Carry out self-evaluation and take timely and corrective measures for improvement.
ICRA is one of the leading credit rating agencies in India, with a sound understanding of the MSME sector and its “real world” dynamics. It offers its MSME rating services in two ways: