The Hindu Business Line : Small sector rating agency opens ‘seva kendra’ in Coimbatore

Coimbatore, Aug. 6 The Small and Medium Enterprises (SMEs) in the country, which have secured rating from the SME Rating Agency of India Ltd (SMERA), have been able to obtain financial assistance at concessional rate of interest from the lending institutions - the interest rate reduction ranging from 0.25 percentage point up to even 3.5 percentage points.

SMERA, which opened the first SME Seva Kendra in Coimbatore on Monday to guide the SMEs to provide greater access to bank credit through quality rating and trade intelligence on products etc, plans to open 60 Seva Kendras for the SMEs across the country.

Speaking to presspersons here, Mr Rajesh Dubey, Chief Executive Officer (CEO), SMERA, Mumbai, said rating was a strategy that would help the SMEs to learn where they are and how they could improve upon. The awareness among the SMEs at the grass root level of various Government schemes launched to benefit them was very low. The Kendras would help to bridge this gap. It would also help train the SMEs in areas of their weaknesses – basics of accounting, IT, HR practices etc. SMERA did not want to compete with other service providers. It would rather be a channelising agency for services provided by others.

The Seva Kendras opened by SMERA would help more and more units to obtain rating. The SMERA personnel would be adopting a census based approach and they would encourage the SMEs to come to the Kendras with their exact requirements. Asked about the interest rate concessions the SMEs were able to get because of the rating assigned by SMERA, he said more than 20 per cent of the entities that were rated by SMERA obtained interest rate benefits or loans on preferential terms such as reduction in margin requirements or increased exposure by the banks. The interest rate cut ranged from 0.25 percentage point to one percentage point and in some cases, it was as high as even 3.5 per cent.

To a question as to whether SMERA had taken up the with the banks to continue to offer lower interest rates to rated SMES, Mr Dubey said if the increase in interest rates led to reduction in the profitability that would hurt their loan servicing capability, it would not be a healthy situation for the banks as well as the SMEs.

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