The Micro, Small and Medium Enterprises (MSMEs) Sector contributes significantly to the Indian Economy in terms of Gross Domestic Product (GDP), Exports and Employment generation.

As per Central Statistics Office (CSO), Ministry of Statistics & Programme Implementation (MOSPI), the Share of MSME Gross Value Added (GVA) in total GVA during 2016-17 was 31.8%. The Share of MSME related Products in total Export from India during 2018-19 was 48.10%.

MSMEs have remained largely under-served by Financial Institutions despite their contribution to the economy. Micro, small and medium enterprises (MSMEs) still find access to formal credit a challenge with nearly 40 percent of lending happening through informal sources, according to a new report by the Omidyar Network and BCG.

MSMEs face the following challenges with the current system:

1. Availability of Finance

Service-oriented MSMEs are unable to mortgage their equipment against loans like the manufacturing sector, posing a challenge for them to avail finance.

2. Creditworthiness

It is a difficult task for banks and financial institutions to assess the creditworthiness, choosing enterprises with good CIBIL score, detailed audited financial statements or have assets to offer as collateral.

3. Credit Flow

There is a gap in the availability of funds to the SMEs and the government’s focus on increasing credit flow to this segment, which needs to be filled up.

4. High Cost

Funds are available at a high rate of interest.

In order to combat these challenges, the Rating Scheme has been introduced by the Government of Punjab. The Rating Scheme is meant to encourage the Micro and Small sector in improving its contribution to the economy by way of increasing their productivity, since 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.

 How the Credit Rating help the MSME Sector

1. Credit Rating gives the lender a more holistic view of a borrower’s creditworthiness                                      and associated risks for credit underwriting.

 2. A good rating can help you gain faster and cheaper credit for the venture.

 3. Another advantage of rating is that the highlighting of strengths and weaknesses acts                                as a trigger for self-correction.

 4. Since rating is an independent third party opinion on creditworthiness, it helps in providing confidence to the lenders and various stakeholders.

Our Role

There is provision of reimbursement of 25% of the rating fee subject to a maximum of Rs. 10,000 for Credit Rating by Micro and Small Enterprises carried out by the Government agency/ SIDBI and NSIC/ Govt. accredited credit rating agencies.

We strive to get the reimbursement of the rating fee for you avoiding paperwork, with Government Departments, follow ups etc. so that you can concentrate on your business and we take care of benefits for you.

We would also like to draw your attention towards reimbursement of expenses on safety audit which is now possible.