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Credit rating helps access capital


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A credit rating is an independent assessment of financial health of a company and its ability to repay obligations. One of the most critical inputs for the growth of SMEs is access to capital and a credit rating can substantially improve the possibility of SMEs to have access to capital from the market.

Published in: Economy & Finance, Business
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Credit rating helps access capital

  1. 1. Religare Finvest Limited Credit Rating Helps Access Capital
  2. 2. Emerging Entrepreneurs Empowering Economy
  3. 3.  Contributing 45% of industrial output and 40% of exports  Employing 60 million people, creating 1.3 million jobs every year  Producing more than 8000 quality products for the Indian and international market  17% contribution towards GDP in 2011  Approximately 30 million MSME units in India Playing A Vital Role In The Growth Of Indian Economy Manufacturing Enterprises Service Enterprises Description INR INR Micro Enterprises Upto Rs. 25 Lakhs Upto Rs. 10Lakhs Small Enterprises Above Rs. 25 Lakhs & upto Rs. 5 Crores Above Rs. 10 Lakhs & upto Rs. 2 Crores Medium Enterprises Above Rs. 5 Crores & upto Rs. 10 Crores Above Rs. 2 Crores & upto Rs. 5 Crores Small and Medium Enterprises
  4. 4. Obstacles Faced B a r r i e r s t o G r o w t h Lack of Sound Infrastructure Regulatory Set-up Political Risk and Interference Lack of Organized Information Sources ` ` ` ` ` Inadequate Access to Capital
  5. 5. Credit Ratings How They Help…
  6. 6. Role of Credit Rating Agencies Assess Financial Viability & Capability to Honor Business Obligations Provides Insights into Firm’s Sales, Operational & Financial Composition Assess the Risk & Overall Health of the Enterprises Benchmark Firm’s Performance vis-à-vis Particular Industry
  7. 7. Benefits Third Party Assessment of an MSME Brings Four-Fold Benefits ► A good rating can help enterprises gain faster cheaper credit ► Rated MSMEs enjoy a higher credibility in the eyes of MNCs & corporates ► Rated MSMEs get to know their areas of improvement, enabling corrective steps ► Government seems to favor rated MSMEs
  8. 8. More Advantage Helps Access Capital Faster Loan Disbursement Opens New Avenues Helps Organize Finances External Validation Better Governance Brings Discipline in Cash Flow Management Preferential Interest Rates Capital Structure
  9. 9. Kanchan Jain President & Chief Risk Officer About the Author… Ms. Jain is responsible to develop and execute the Business Plan on solution based financing for SMEs, besides running the Risk & Audit function. Kanchan brings with her, over 18 years of rich experience in Fixed Income, Project Finance, Capital Markets and Global Structured Products across Europe & Asia, with marquee organizations.
  10. 10. +91-9582218813 – Mohit Gupta ; Thank You