SME Rating Agency PPT
-
Upload
ashishkanojia1233411 -
Category
Documents
-
view
157 -
download
9
Transcript of SME Rating Agency PPT
![Page 1: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/1.jpg)
PRESENTED BY GROUP NO. 9
• ANIRUDDHA SAHSARABUDDHE - 41
• SUSINA KUVACHERRY - 28
• ASHISH KANOJIA - 21
• VAIBHAV KAMTEKAR - 20
• VINOD JAISWAR - 46
![Page 2: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/2.jpg)
SME Rating Agency of India Ltd
![Page 3: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/3.jpg)
Minimise lending risk thru ratings 3
SMERA – An Introduction
• Only rating agency dedicated to the SME segment offering qualitative services at competitive prices.
• Joint initiative of SIDBI, Dun & Bradstreet and 11 leading banks operating in SME segment.
• Launched on the 5th September 2005 by the Hon. Finance Minister, Shri P Chidambaram.
• Completed around 2300 ratings till date.
• Greater acceptability in banks (MOU with 22 leading banks). 14 Banks offer interest rate and security concessions for well rated SMERA customers.
![Page 4: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/4.jpg)
Minimise lending risk thru ratings 4
Relevance for a rating Agency dedicated for SMEs
• Focused approach towards SMEs
• Strong data & knowledge-base about SMEs
• Different evaluation approach based on size and industry
• Ability to analyze in limited and lesser reliable information
• Emphasis on non-financial parameters
TO BRIDGE THE GAP BETWEEN FINANCIERS AND SMEs
![Page 5: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/5.jpg)
Minimise lending risk thru ratings 5
SME Expectations for growth
![Page 6: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/6.jpg)
Minimise lending risk thru ratings 6
SMERA Contribution & Challenges
SMERA undertakes risk profiling of SME clusters as an ongoing activity.
Participated / organized more than 250 seminars / workshops / customers meets, etc.
Published Emerging SMEs in India in association with D&B - auto components, textiles, food processing, pharmaceutical, engineering and chemicals segments.
To provide information on SMEs
To demonstrate advantages of rating to SMEs and lenders
![Page 7: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/7.jpg)
Minimise lending risk thru ratings 7
Highlights of SMERA Ratings
Provides ratings that are :
Independent
Comprehensive
Transparent
Enables better understanding of SMEs by lenders while taking credit decisions.
Neutral Risk Assessment
Conducts an exhaustive due diligence process
Rating Rationale discussed with rated entities
![Page 8: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/8.jpg)
Minimise lending risk thru ratings 8
Rating Process Flow
Request for Interview and
site visit
Rating Request SMERA Site visit Enterprise
Questionnaire
Documents, audited results
& certified projections
Site Visit Assessment
Report
ROC Information
Rating Model
Industry Assessment and Cluster
data
Rating Analyst
Peer Review
Third Party Data – e.g. Litigation
Information
Conducts site visit and
interviews Management
Documents Obtained
External Data
SMERA Database
Entity RatingFinal Rating
![Page 9: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/9.jpg)
Minimise lending risk thru ratings 9
SMERA Rating Scale
![Page 10: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/10.jpg)
Minimise lending risk thru ratings 10
Factors considered while rating
Parameters of Rating
Financial Non-Financial
Solvency Ratios
Liquidity Ratios
Profitability Ratios
Activity Ratio
Management Quality
Location Advantage
Marketing Network
Legal Issues
Industry and Macro-Economic Assessment
e.g. Debt-Equity Current Ratio RONW Asset- turnover
![Page 11: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/11.jpg)
Minimise lending risk thru ratings 11
Non-Financial Parameters
![Page 12: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/12.jpg)
Minimise lending risk thru ratings 12
Above fees is inclusive of service tax @ 10.30%
NSIC - D&B - SMERA Rating Fee
Category Fees Service Tax Total
Turnover Rs. Rs. Rs.
< 50 Lacs 7,500 7,73 8273
50 to 200 Lacs 9,000 927 9,927
> 200 Lacs 12,000 1,236 13236
![Page 13: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/13.jpg)
Minimise lending risk thru ratings 13
SMERA Rating Fee
Category Fees Service Tax Total
Turnover Rs. Rs. Rs.
< 50 Lacs 30,000 3,090 33,090
50 to 200 Lacs 36,000 3,708 39,708
> 200 Lacs 48,000 4,944 52,944
![Page 14: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/14.jpg)
Minimise lending risk thru ratings 14
Why SMERA?
SME focus – independent, transparent, comprehensive rating
Systematic and scientific basis for industry specific rating models
Partnership with banks spanning the Indian Banking Space
D&B as knowledge partner with global rating experience and expertise
![Page 15: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/15.jpg)
Minimise lending risk thru ratings 15
Advantage – External Rating
External Risk Rating Models
Emphasis mainly on pst relationship & financial aspects
Industry benchmarking – nil or limited
Generalization of SMEs across geographic boundaries
Banks are involved as financiers;
Looking to the past
Enterprise Rating by SMERA
Rating beyond financials
Robust industry benchmarking and also linked to size
Consideration to parameters specific to a geographic location
Ratings are neutral; credit enhancement measures are not reckoned Looking beyond
![Page 16: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/16.jpg)
Minimise lending risk thru ratings 16
Benefits of SMERA Rating
• Third party credit rating helps in extending additional comfort for internal decision making.
• Validation of the internal ratings.
• Intrinsic Strengths of SME units captured as model also considers qualitative parameters in addition to financial results.
• Strengthening of Credit Portfolio thru rating/review ratings – early warning signals.
• Impact of industry related cyclical trend considered in rating.
• Cluster centric approach.
![Page 17: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/17.jpg)
Minimise lending risk thru ratings 17
SMERA Milestones
SMERA has been sanctioned technical assistance under the World Bank led multi-lateral SME Financing & Development Programme.
Adjudged as Best SME Development Project in Asia-Pacific region
Offices at - Ahmedabad, Bangalore, Chandigarh, Chennai, Coimbatore, Delhi, Hyderabad, Jamshedpur, Kolkata, Ludhiana, Mumbai, Nagpur, Nasik, Surat, Rajkot Surat & Pune.
SMERA rated clients receive preferential treatment from lenders
![Page 18: SME Rating Agency PPT](https://reader036.fdocuments.us/reader036/viewer/2022081413/546a3f0ab4af9fd2038b474e/html5/thumbnails/18.jpg)
THANKING YOU