The Hindu Business Line : SMEs demand for credit rating on the rise

Chennai, Jan. 31 Since its inception in September 2005, the SME Rating Agency of India Ltd (SMERA) has credit rated 1,400 small and medium sized companies, SMERA’s Chief Executive Officer, Mr Rajesh Dubey, said on Thursday.

The demand for its services, as revealed by the trend in number of companies rated, is growing. In the first six months of 2005-06, SMERA rated 101 SMEs. In the next full year, it did 445 companies. In the current year upto January, the agency has rated another 850 companies. Mr Dubey expects to rate at least another 350 companies before the year is out.

The trend indicates that SMEs are finding that getting a rating from the agency helps. Sometimes a rating helps in getting bank funds at a slightly lower rate of interest, but more often than that, it gives the lender a higher level of comfort. A rating has also helped some companies to boost their image and secure more business.

MOU with Indian Bank

SMERA on Thursday entered into a MoU with Indian Bank, under which the bank’s SME customers could avail themselves of the agency’s services for a slightly lower fee. The MoU, it was said, would encourage SMEs to get themselves rated.

Indian Bank’s Chairman and Managing Director, Mr M.S. Sundara Rajan, said that the bank’s SME credit book grew 27 per cent to Rs 5,352 crore.

SMERA, a joint venture of SIDBI, Dun & Bradstreet and Credit Information Bureau (India) Ltd, is the only credit rating agency exclusively for small and medium scale companies. However, the services is also available from CRISIL Ltd, which has a rating product for SMEs. It also has another product called M-Cril, meant for micro-finance institutions.

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