SMERA RATINGS LIMITED
SMERA-D&B-NSIC Micro & Small Enterprises RatingsBuilding
Trust | Enabling Transactions
SMERA Ratings Limited, a joint initiative of SIDBI, Dun &
Bradstreet and leading banks of India, offers Micro and Small
Enterprises (MSEs) an opportunity to build credibility through its
Micro & Small Enterprises Rating, which is custom designed for
MSE sector. The Ministry of MSME provides financial assistance to
MSEs through its Performance & Credit Rating Scheme, in the
first year of rating. SMERA’s ratings are well accepted amongst the
lending fraternity. SMERA has MoUs with over 40 banks, financial
institutions and trade associations of the country.
SMERA Micro & Small Enterprises Rating Provides Confidence
to Lenders, Buyers, Suppliers and other Business Partners
The MSE Rating is an independent and unbiased opinion on the
credit-worthiness of the rated entity relative to other MSEs. The
Report also provides levels of financial strength and operating
performance of the entity. The MSE Rating is arrived at after
rigorous assessments of Business & Financial Risks, and
Management Evaluation. A site inspection is also carried out as
part of the rating process.
Lack of timely and easy access to low cost credit is the most
crucial challenge for the Indian MSEs. Information asymmetry is a
hurdle that lenders face; banks and other lending institutions do
not have adequate information required to process and approve
credit facilities for MSEs. Lack of independent, reliable and
unbiased opinion on MSEs leads to inadequate & delayed credit,
high rate of interest and limited negotiation power.
SMERA MSE Rating Scale
Challenges Faced by MSEs
www.smera.in | Helpline: + 91 22 6714 1144 | SMS: + 91 70457
98432 | E-mail: [email protected]
Benefits of SMERA MSE Rating
For LendersFor the Rated Entity For Corporate Entities
• Establish mutual trust with the counterparty (buyer / lender)•
Understand own strengths and areas of improvement • Gain
negotiation power for fair terms of transaction based on mutually
acceptable information• Complimentary D-U-N-S® Number that is
recognised globally
• Understand Rating factors • Understand strengths and areas of
improvements of the borrower• Faster loan processing and lending
decisions • All necessary information needed for credit appraisal
at one place
• Identify and approve vendors based on their financial strength
and operating performance • Decide on credit terms for dealers and
buyers based on independent opinion on credit worthiness
Financial Strength Categories
Highest
High
Good
Above Average
Average
Below Average
Weak
Poor
Operating Performance Categories
Highest
High
Average
Weak
Poor
Rating Scale Credit Worthiness
SMERA MSE 1
SMERA MSE 2
SMERA MSE 3
SMERA MSE 4
SMERA MSE 5
SMERA MSE 6
SMERA MSE 7
SMERA MSE 8 Poor
Highest
High
Good
Above Average
Average
Below Average
Weak
Mumbai | New Delhi | Chennai | Kolkata | Bangalore | Hyderabad |
Ahmedabad | Surat | Coimbatore | Jaipur
At the time of SMERA’s incorporation (2005) it was felt that
Indian MSEs need specialised rating model and rating scale to avoid
being unfairly compared with large corporations. SMERA was
conceived by Ministry of Finance to address this problem and help
create a positive environment for Indian MSEs. Having assigned more
than 40,000 Ratings, SMERA has a robust database that provides high
quality MSE specific industry-wise benchmarks and insights.
Process for SMERA MSE Rating
Why SMERA
Site Inspection & Management
Discussion
Submission of Information
& Documents
Detailed analysisby
Rating Analyst
Rating Committee assigns Rating
Communicationof Rating to
the Rated Entity
Dissemination of Rating
on Acceptance by client
SMERA Ratings Limited is a full service Credit Rating Agency,
registered with the Securities and Exchange Board of India (SEBI)
and is accredited by Reserve Bank of India (RBI) as an External
Credit Assessment Institution (ECAI), for undertaking Bank Loan
Ratings under BASEL-II norms. SMERA is empanelled with The National
Small Industries Corporation Limited (NSIC), the nodal agency of
the Ministry of MSME, Government of India to provide
SMERA-D&B-NSIC Performance and Credit Rating for MSEs in India.
SMERA has assigned more than 40,000 ratings since inception.
About SMERA
Rating Methodology
SMERA’s MSE Rating Coverage
Dun & Bradstreet
State Bank of India
Canara Bank
Standard Chartered Bank
SIDBI
Bank of Baroda
Oriental Bank of Commerce
Indian Bank
ICICI Bank
Bank of India
Union Bank of India
Punjab National Bank
SMERA’sShareholding:
Formidable Institutional
Backing
Business Risk Analysis
1. Industry Factors 2. Cost Structure 3. Capacity Utilization 4.
Geographical Diversity5. Use of Technology
Financial Risk Analysis
1. Accounting Quality 2. Past Financial Performance 3. Solvency
4. Liquidity 5. Profitability
Management Evaluation
1. Promoters’ Experience 2. Past Track Record 3. Net Worth 4.
Market Feedback5. Management Team
Sector No. of Ratings Sector No. of Ratings
Auto Ancillary Civil & ConstructionChemicals Electrical
& Electronics
Electrical & Engineering Goods Paper & Packaging
Food & Agro Wood & Wood Products
Metals & Metal Products Gems & Jewellery
Pharmaceuticals IT & ITES
Printing & Publishing Plastics
Services Rubber & Rubber Products
Textiles Aluminium
Traders Other
3,5751,575
2,750
1,853
7,352
1,675
1,305
1,823
3,560
1,953 2,557
2,810
411
353
380
423
515
1,473
2,6011,160
As a part of MSE Ratings, SMERA also provides D-U-N-S® Number,
which is referenced by lenders and potential business partners
globally to help predict the reliability and/or financial stability
of an entity before entering into a transaction.
