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Credit rating is not a necessary
requirement for a micro and
small enterprise to obtain loan
from banks and financial institutions
at economical rates.
However, credit rating does
serve as a trusted third-party
opinion on the creditworthiness
of the MSE, and a good rating
helps the enterprise obtain
faster and concessional credit
from banks.
In this regard, the ministry of
micro, small and medium enterprises
has implemented the
"Performance and Credit Rating
Scheme" that assigns credit and
performance rating by a reputed
and accredited independent rating
agency. Up to March 31,
2010, a total of 19,207 MSEs
have been assigned rating
under this scheme and
1,652 applications are under
process with seven empanelled
rating agencies.
Rating by an independent rating
agency provides deep
insight into an MSE's operations.
It reveals the creditworthiness
of the company in relation
to its peers in the sector and
assessment of its strengths and
weaknesses, based on its financial
condition and performance.
A good rating thus helps banks
and FIs to assess the strengths
and creditworthiness of MSEs
and facilitate credit to them on
easier terms.
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