The Hindu Business Line : NSIC bid to draw more SSIs to new credit rating scheme

THE National Small Industries Corporation Ltd (NSIC), in a bid to sensitise the small and medium enterprises (SMEs) to the usefulness of its newly introduced credit rating scheme for small industries, has set up special help desks at its zonal office here.

The need for a performance and credit rating mechanism for SSIs was highlighted in the 2004-05 Budget.

Participating in a workshop on `NSIC financial/marketing schemes for development of SMEs', organised by the Merchants Chamber of Commerce here recently, Mr P.K. Biswas, Zonal GM, NSIC, said the rating scheme has been formulated in consultation with the Indian Banks Association (IBA) and top rating agencies in the country. NSIC, he clarified, has been appointed the nodal agency by the Government of India for implementation of this scheme through empanelled agencies.

Urging SSIs to make full use of the scheme, Mr Biswas said a major positive fallout of the scheme was an independent, trusted third party opinion on the capabilities and credit-worthiness of SSIs, which in turn would lead to availability of credit to this sector at attractive interest rates.

A uniform rating scale was being adopted for all empanelled agencies, and SSIs were at liberty to choose from among the agencies such as Dun & Bradstreet (D&B), ONICRA, ICRA, CARE, Fitch Ratings and Crisil.

He clarified that the fee structure was turnover based, and 75 per cent reimbursement of the rating fee would be through NSIC, or Rs 45,000, whichever is less, if the turnover of the SSI was over Rs 2 crore. The rating programme would cover a combination of credit and performance factors including operations, finance, business models and management.

Mr Biswas said a major benefit of the scheme for banks and financial institutions was the availability of independent evaluation of the strengths and weaknesses of an SSI unit seeking credit, thus enabling the banks and FIs to manage their credit risk more effectively.

Mr Ashish Jhunjhunwala, Senior Vice-President of MCC, said the timeframe for availing of various facilities offered by NSIC should be short, "as any delay in processing of applications results in escalation of project costs and consequent rise in product prices.

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