MSMEs seeking factoring credit should get ratings: Parliament panel to govt

There is often delay in MSMEs getting payment against their bills for supplying to various buyers

The government should encourage rating agencies to provide ratings to MSMEs that seek loans based on receivables, or factoring credit, the Parliamentary Standing Com­mittee on Finance said in its report. With the government proposing amendments to the Factoring Regulation Act, 2011, the volume of business through factoring credit is expected to expand, according to the report.

“This may be accomplished by encouraging the existing credit rating agencies to provide ratings for the MSMEs that are actively seeking to factor in their receivables,” it said.

The Factoring Regulation (Amendment) Bill, 2020, was introduced in the Parliament in September 2020, and was referred to