Financial Daily from THE HINDU group of publications
Sunday, Dec 11, 2005
Financial Daily from THE HINDU group of publications Sunday, Dec 11, 2005 |
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Industry & Economy
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SSI Money & Banking - Credit Market Rating agency signs MoU with five banks for loans to SMEs Our Bureau
New Delhi , Dec. 10 THE small and medium enterprises (SMEs) in the country can now hope to avail loans at softer rates. SME Rating Agency (SMERA) has signed memorandum of understanding with five commercial banks to link their credit ranking to extend credit at 2.5 per cent lower rate to SMEs, said the SMERA Chief Executive Officer, Mr Rajesh Dubey. Inaugurating a seminar on Credit Rating Agencies vs. SMEs, organised by the Associated Chambers of Commerce and Industry of India, Mr Dubey named the five banks as State Bank of India, Canara Bank, Bank of India, Union Bank of India and Syndicate Bank. "The objective of the MoU will be to make private banks also to extend credit at lower rates. The current rate of interest normally at which the SMEs are getting loan facilities from banks and financial institutions range between 11 per cent and 12 per cent against their loan extension facilities to large corporates at around six per cent," said Mr Dubey. He said that SMERA was also developing a new credit rating model for start up entrepreneurs. SMEs that have net worth of up to Rs 1.5 crore have to pay Rs 7,500 to SMERA as the application fee for obtaining its credit rating. For units whose net worth exceeds from Rs 1.5 crore to Rs 5 crore, the fee would be Rs 25,000. For SMEs units whose net worth exceeds Rs 5 crore and goes up to Rs 20 crore, the fee would be Rs 37,500. For SMEs units whose net worth exceeds Rs 20 crore, the fee would be Rs 50,000, said Mr Dubey.
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