Need of a Performance and Credit Rating Mechanism for SSIs (now Micro and Small Enterprises) was highlighted in Union Budget’04-05. A scheme for SSIs (now Micro and Small Enterprises) has been formulated in consultation with Indian Banks’ Association(IBA) and Rating Agencies. NSIC has been appointed the nodal agency for implementation of this scheme through empanelled agencies.
Benefits of Performance and Credit Rating
- An independent, trusted third party opinion on capabilities and credit-worthiness of SSIs
- Availability of credit at attractive interest
- Recognition in global trade
- Prompt sanctions of Credit from Banks and Financial Institutions
- Subsidized rating fee structure for SSIs
- Facilitate vendors/buyers in capability and capacity assessment of SSIs
- Enable SSIs to ascertain the strengths and weaknesses of their existing operations and take corrective measures.
Benefits to Banks and Financial Institutions
Availability of an independent evaluation of the strength and weaknesses of an SSI unit seeking credit and thereby enabling banks and financial institutions manage their credit risk
- A combination of credit and performance factors including operations, finance, business and management risk
- Uniform Rating Scale for all empanelled rating agencies.
- SSIs have the liberty to choose among the empanelled Rating Agencies.
- Turn-Over based Fee structure
- Partial Reimbursement of Rating Fee through NSIC
Source : http://www.tradingeconomics.com