Credit rating helps MSMEs in fund raising

Speaking to Deccan Herald, CRISIL Ltd Head (SME Ratings) Yogesh Dixit said: “Going by the feedback we have received from the firms we rate, it was seen that they get finance at lower rates of interest, credit comes faster helping them grow their business quickly.”
Pointing out that the agency has assigned ratings to about 20,000 units across India, Dixit said: “We have tied-up with 34 banks including some private sector banks to help such units.”

Observing that MSMEs generally lack information that banks seek before extending financial aid, the agency claims that its rating, conducted by professionals, makes up for these, thereby, allowing banks to hasten the process of providing loans. “The banks also appreciate the risk profile of enterprises that we have rated and in general, they extend loans at rates lower by 0.25 per cent to 1.25 per cent than the market rate,” Dixit added.

Other challenges faced by the MSME sector are gaining adequate access to the market place, ability to build brands, availability of appropriate infrastructure and skilled manpower are the major ones.

Gaining access to the market place and building a brand are, generally stuck in a vicious circle. It is hard to enter the market without a brand... It is also hard to build a brand withput access to the market. Crisil has also found that MSME units in Karnataka are among the top three employers in the country.

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