About SMERA

MoU between CII and SMERA

Towards facilitating the availability of bank credit for the SMEs, CII has entered into a MoU with the SME Rating Agency of India Ltd (SMERA). The MoU was signed by Mr Rajesh Dubey, Chief Executive Officer (CEO) of SMERA and Mr Ravi Poddar, Chairman, CII SME Forum at an interactive session with the SME Policy makers organized by the CII, in Chennai, on 28th July 2006.

While speaking at the occasion, Mr V Chandrasekaran, Executive Director, Small Industries Development Bank of India (SIDBI) mentioned that a major obstacle in SME development is its inability to access timely and adequate finance. There are several reasons for low SME credit penetration, key among them being insufficient credit information on SMEs, low market credibility of SMEs (despite their intrinsic strengths) and constraints in analysis. This leads to sub-optimal delivery of credit and services to the sector and the Rating Agencies can play an important role in addressing some of these concerns. In this context, SME Rating Agency of India Ltd (SMERA) is wholly committed to facilitating the overall growth and development of Indian SMEs.

The MoU with SMERA was in line with the annual theme for CII SME Forum, Competitiveness for Sustainable and Inclusive growth of the Indian SMEs, according to Mr Ravi Poddar, Chairman, CII SME Forum. He added that the focus of the CII SME Forum is on development of competitive policy framework, & adapting Best Practices.It is expected that this will provide a thrust to the credit offtake for the SMEs, while facilitating the availability of finance and giving the banker an independent third party perspective. The SME policy earlier announced by Government of India also laid emphasis on using this as a tool for increasing credit to the sector.

CII has also earlier been very closely associated with S L Kapur''s committee on Availability of credit to the Small industry as well as the RBI committees on Credit to the SME sector. It is anticipated that the MoU will serve as a trusted third party opinion on SME units'' capabilities and creditworthiness, as an Independent evaluation by an accredited third party will have good acceptance from Banks, Financial Institutions, SME Customers and Buyers, enable SMEs to secure adequate credit from Banks and Financial Institutions on time & at competitive cost, benefit Banks and Financial Institutions by providing them an independent evaluation of the strengths and weaknesses of the applicant borrowing unit, which would help them in evaluating risk and taking credit decision, and facilitate vendors/buyers in judging the capabilities and capacity of the SME units for taking a decision on finalization of purchase contacts with them.

Several leading public and private sector banks that are active in the SME space also support SMERA. The recognition and acceptance of SMERA''s ratings within the banking sector will help SMEs save time, effort and money while approaching different banks for credit. It will also simplify and quicken the process of lending to SMEs, while simultaneously reducing lending costs to the sector as a whole.

SMERA Rating Fee

Due to escalation in cost of rating, SMERA has been compelled to revise its rating fee across the board.  The revised rating fee will be effective from 16th August 2006. SMERA rating fee structure is given below:

For Eligible SSI units under NSIC Subsidy Scheme

For units for SMERA Credit Rating

*Inclusive of Service Charges

*All Figures in INR