A joint CII and ONICRA publication titled “Performance and Credit Ratings: Giving Indian MSMEs a Cutting Edge to Compete” was released on 9 October against the backdrop of the ‘Global SME Business Summit 2014: Enabling Global Economic Growth through SME Partnerships’ organized by CII on 8 - 9 October, 2014 at New Delhi.
The government has introduced various schemes through its institutional infrastructure to support MSMEs. The report examines the performance and credit rating scheme under implementation by the National Small Industries Corporation (NSIC) as the nodal agency in conjunction with empanelled credit rating agencies, Indian Banker’s Association (IBA) and Small Industry Associations (SIAs). The rating serves as a trusted third-party opinion on the MSME’s unit’s capabilities and credit worthiness.
It is brought out that the scheme has helped MSMEs access finance at a lower cost of borrowing thus improving opportunities for greater financial inclusion. Further, the ratings have today extended their reach to small businesses operating in Tier II and Tier III cities. The study also presents the experiences of several small business owners by highlighting how ratings have helped them solve many problems. The report also recommends various initiatives that can be taken to foster growth in the MSME sector.