Credit ratings becoming popular with micro, small firms

National Small Industries Corporation (NSIC) aims at providing credit rating to over 9,000 micro and small enterprises in 2010-11 with the help of leading agencies like Care, Crisil and Fitch.

"Due to the global slowdown, the number of firms coming for credit rating was not high in 2009-10. With the revival in the economy, more units in the micro and small enterprises are expected to opt for their rating this fiscal," NSIC Chairman and Managing Director H P Kumar said.

NSIC has a tie-up with well-known agencies, including SMERA and Dun & Bradstreet. Seventy-five per cent of the rating fee is borne by the corporation, while the companies need to pay the remainder.

Kumar said the rating of the company's financial health helps them get access to credit quicker and cheaper. It also helps in enhancing their acceptability in the market.

NSIC is the nodal agency for implementing the rating scheme of the Ministry of Micro, Small and Medium Enterprises (MSME).

He said the units can choose any of the agencies empanelled with the NSIC.

The MSME sector, which was hit-hard due to the recent global financial meltdown, contributes eight per cent to the country's Gross Domestic Product, besides 45 per cent of manufactured output and 40 per cent of exports.

According to government data, there are 2.6 crore micro, small and medium enterprises in the country employing about 6 crore people.