The MSEs which score the highest rating (SE A1) on the rating scale will be provided with a 1 per cent reduction in the rate of interest for the loan they take from banks. This rating is based on highest prospects of performance and the high capacity of the unit to meet its financial obligations.
A concession of 0.5 per cent will be provided to the units which score the second highest rating (SE 1B). This rating is for the units with highest prospects of performance. However, the entity has moderate capacity to meet its financial obligations.
Similarly, those enterprises which score the rating SE 2A on the rating scale will be incentived with a concession of 0.5 per cent in rate of interest. This rating is given where prospects of performance are high and the entity has high capacity to meet its financial obligations.
|
Rating Scale |
Performance & Credit Parameters |
Reduction in Rate of Interest |
|
SE 1A |
Highest Performance capability; High Financial Strength |
1.00 per cent |
|
SE 1B |
Highest Performance capability; Moderate Financial Strength |
0.50 per cent |
|
SE 2A |
High Performance capability; High Financial Strength |
0.50 per cent |
Source: NSIC
This move by NSIC has brought in an opportunity to encourage small industries in improving their contribution to the economy by way of increasing productivity. A good rating would enhance their acceptability in the market and also make access to credit quicker and cheaper and thus help in economizing the cost of credit.
The Performance and Credit Rating scheme was formulated to give a boost to MSEs and infuse a sense of confidence amongst the buyers for taking a decision on the options of sourcing material from small scale units.
NSIC is the nodal agency for implementing the scheme. It also empanels rating agencies in order to facilitate the rating process. The NSIC rating scale has 15 ratings – SE 1A being the highest and SE 5C the lowest.