Editorials

by Rajen Kumar

No Escaping Social Media

Running a magazine concentrating on issues of small and medium enterprises and managing with limited resources is a like living life on the edge. In this rush of meeting deadlines,...

Special Reports

Apr 2012

EMRC, Brussels Associates with SME WORLD as its New Media Partner

EMRC has promoted business partnerships with the developing world and has organised dozens of business forums in key decision-making cities, such as Amsterdam, Rome,...

Interviews

Credit Ratings enhances the credibility of enterprises : Ramraj Pai

SME WORLD Bureau
Feb 2010

CRISIL Ratings is a complete service rating agency that offers a comprehensive range of rating services. CRISIL Ratings provides the most reliable opinions on risk by combining its understanding of risk and the science of building risk frameworks, with a contextual understanding of business.

It is the only rating agency to operate on the basis of a sectoral specialisation, which underpins the sharpness of analysis, responsiveness of the process and large-scale dissemination of opinion pieces.

The agency has rated over 21,286 debt instruments worth Rs.29.63 trillion (over USD 613.005 billion)* issued by over 8,656 debt issuers, including manufacturing companies, banks, financial institutions (FIs), state governments and municipal corporations.

CRISIL Ratings also offers technical know-how overseas. For instance, it has provided assistance and training for setting up ratings agencies in Malaysia (RAM) and Israel and in the Caribbean . In March 2004, CRISIL took up an equity stake of about 9% in the share capital of the Caribbean Information & Credit Rating Services Limited (CariCRIS), with an investment of US $ 300,000. The Caribbean rating agency is a unique initiative -- it is the world's first regional credit rating agency. It will offer rating and other services in 19 countries. CRISIL will also provide technical assistance to the agency to establish and stabilise its operations.

SME WORLD spoke to Ramraj Pai, Director, SMR Ratings, recently.

What are the benefits of Credit Rating and its benefits?

Credit ratings are useful in understanding the ability of an enterprise to repay its loans on time. Typically, they are represented in the form of symbols like AAA, AA, SME 1 etc to facilitate easy and simple understanding. Such ratings are typically undertaken by independent credit rating agencies like CRISIL. An independent credit rating from CRISIL provides confidence to investors in their lending decisions and enables them to understand the risks involved in lending to a specific enterprise better.

Historically, credit ratings were an exclusive preserve of larger corporate. Credit ratings were typically used by them in enhancing their credibility and increasing the comfort of lenders, thus reducing interest rates and increasing their access to funds.

However, there was no specific product or service that was designed for SMEs keeping in mind their specific needs and requirements. Credit evaluation in the SME sector needs a specialised approach, as the issues and drivers of credit quality are different from those applicable for large companies. The weightages assigned to various parameters of evaluation therefore need to be different. CRISIL introduced SME ratings in 2005 and by now we have rated nearly 10,000 SMEs.

SME Ratings are offered on an exclusive rating scale, distinct from regular ratings offered to large corporations, banks and government entities. This is a significant and major step towards empowering SMEs, increasing their access to funds and at the same time driving the entire eco system towards higher level of transparency and corporate governance.

Who need Credit Rating?

To read full article please subscribe SME WORLD

0 Comments >>

Our Achievements

Winner of appreciation award for promoting SMEs in India.
1st ever Indian magazine to penetrate tier II, III cities & the rural belt.
Industry Partnerships include CII, FICCI, ASSOCHAM, PHDCC, AIMA, ITPO, SME Network, Federation of Indian Micro Small Enterprises (FISME)
Official Magazine Partners for several national & international MSME events.

The Last Word

More Learned than Educated, You were!

I was speechless. Rather hesitatingly I asked him, “So, what have you decided, Sominder ?” His reply was curt and candid, “I have told the doctors that I don’t want to live life as dumb. Only...

You can also write for SME WORLD

We are looking for writers and experts to contribute original stories and articles. Send an email to smeworld@gmail.com with your story idea and lets get talking.

Some of our valued contributors are...