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Credit rating incentive

Salil Chaturvedi in Calcutta on Friday. A Telegraph picture

Calcutta, July 18: Crisil expects more small and medium enterprises to take interest in credit rating by utilising the subsidised rating costs under a scheme of the National Small Industries Corporation (NSIC).

Credit rating is an activity undertaken by enterprises to determine their credit worthiness. Banks are increasingly relying on credit rating companies such as Care, Crisil, Icra and Smera to determine the risk associated with their advances.

At present, the NSIC subsidises the rating fees of up to 75 per cent, encouraging the SMEs to get them rated. However, to get the benefits of the scheme, MSMEs require a registration certificate from the respective directorate at the state level.

“Banks are often not comfortable to lend to MSMEs because they are not financially disciplined. They feel more safer to lend to large and mid-corporates,” Salil Chaturvedi, director (business development), Crisil SME ratings, said at an interactive session at the MCC Chamber of Commerce and Industry.