Demand for SMEs credit rating on the rise

The demand for credit ratings is rising as revealed by the trend in number of companies rated.

SME Rating Agency of India Ltd (SMERA) has rated 1,400 small and medium sized companies, since its inception in September 2005.

Small and medium scale companies (SMEs) are finding that getting a rating from a credit rating agency helps. Sometimes a rating helps in getting bank funds at a slightly lower rate of interest, but more often than that, it gives the lender a higher level of comfort. A rating has also helped some companies to boost their image and secure more business.

SMERA entered into a memorandum of understanding with Indian Bank, under which the bank's SME customers can avail the agency's services for a slightly lower fee.

SMERA, a joint venture of SIDBI, Dun & Bradstreet and Credit Information Bureau (India) Ltd, is the only credit rating agency exclusively for small and medium scale companies. Credit rating services are also available from CRISIL Ltd.