NSIC Credit Rating Scheme
NSIC Credit Rating Scheme
The NSIC credit rating scheme for performance and credit rating seeks to establish independent, trusted third party opinion on capabilities and credit-worthiness of MSEs, and makes credit available at attractive interest rates. It endeavors to enable MSMEs fain recognition in global trade, ensure prompt sanctions of credit from banks and financial institutions, subsidized rating fee structure for MSEs, facilitate vendors/buyers in capability and capacity assessment of MSEs, enable the MSEs to ascertain the strengths and weaknesses of their existing operations and take corrective measures. In this article, we look at the procedure for availing NSIC Credit Rating Scheme.
What is Performance and Credit Rating?
A Performance and Credit Rating is an analysis of performance capability and credit risks associated with a business. Performance and credit rating assignments are completed by approved Rating Agencies which act with independence and without any bias. Some of the factors considered in a performance and credit rating are industry dynamics, financial performance, operational performance, competitive position of the entity, operating efficiency, management capability, organization systems, customer profile, track record with lenders and other stake holders.
Benefits of availing NSIC Credit Rating Scheme
The following are some of the benefits of obtaining a credit rating through NSIC Credit Rating Scheme:
- Provides an independent and unbiased opinion on the financial and operational performance of a business.
- Easy access to bank funding as it creates credibility amongst bankers.
- Confidence building with business partners including investors, suppliers, customers, employees and other stakeholders.
- A self improvement tool that can be used as a benchmark and guide to improving business performance.
- Visibility on the internet and amongst bankers as the rating would be published by the rating agency.
Approved Credit Rating Agencies
The Reserve Bank of India approves organizations which can provide credit rating services in India. The following Credit Rating Agencies are eligible to provide rating under the NSIC Credit Rating Scheme:
Amount of Assistance under NSIC Credit Rating Scheme
Any SSI or MSME unit having MSME or SSI Registration can avail the NSIC Credit Rating Scheme. The nature of assistance provided from NSIC for Credit Rating is dependent on the sales turnover of the business as follows:
- Up to Rs.50 lakh of Sales Turnover: 75% of the fee or Rs.25,000 (whichever is less);
- Rs.50 lakhs to 200 lakh of Sales Turnover: 75% of the fee or Rs.30,000 (whichever is less)
- More than Rs.200 lakh of Sales Turnover: 75% of the fee or Rs.40,000 (whichever is less)
The NSIC Credit Rating Scheme is offered by National Small Industries Corporation (NSIC). NSIC) is a Government of India Enterprise under Ministry of Micro, Small and Medium Enterprises (MSME). NSIC has been working to fulfill its mission of promoting, aiding and fostering the growth of small industries and industry related micro, small and medium enterprises in the country. Over a period of five decades of transition, growth and development, NSIC has proved its strength within the country and abroad by promoting modernization, upgradation of technology, quality consciousness, strengthening linkages with large medium enterprises and enhancing exports – projects and products from small enterprises.
How to avail NSIC Credit Rating Scheme
Any SSI or MSME business wishing to apply for rating will have to fill up the prescribed application form and submit the same to the nearest branch of NSIC or to the rating agency chosen by it, or through empanelled rating agencies such as CARE, CRISIL, India Ratings, ICRA, ONICRA, SMERA, Dun & Bradstreet (D&B), SMERA.