Objective

The key objective of the Performance and Credit Rating Scheme is to provide a third-party opinion on the creditworthiness and capabilities of the Micro & Small Enterprises (MSE)

• To create awareness amongst the Micro and small enterprises ((MSE) about the strengths and weaknesses of the unit’s existing operations
• To provide an opportunity to SSI units to enhance the organizational strengths and creditworthiness
• The performance rated MSE can access the credit at cheaper rates and on easy terms.
• To facilitates the SSI units in increasing the acceptability from the Banks, Financial Institutions, Customers, Buyers, and Vendors.

Benefits of the Scheme

The major benefits accruing under the Performance and Credit Rating Scheme to the rated SSI units include the following:

• As part of this scheme, the rating is independent and the SSI units can get the trusted third party opinion on capabilities and creditworthiness of the units.
• Rating enables SSI units to ascertain the strengths and weaknesses of the existing process and take corrective measures to enhance organizational strength.
• The Good rated MSEME can easily access the funds at cheaper rates and better terms,
• The rating also facilitates prompter credit decisions from Banks on proposals of Micro and small enterprises.
• A good rating under the Performance and Credit Rating Scheme enhances the acceptability of the MSE unit with the customers and buyers.
• This scheme also facilitates buyers in capability and capacity assessment of MSE units before finalizing purchase contracts.

Prescribed Authority

The prescribed authority for the implementation of the Performance and Credit Rating Scheme is National Small Industries Corporation. NSIC is the nodal agency for implementing the PCR scheme through its various branches located in the country. This scheme was formulated in consultation with Indian Banks’Association (IBA), Rating Agencies and Industry Associations.

Rating Agencies

The rating of MSE under the PCR Scheme is being carried out through empanelled rating agencies. Micro & Small enterprises have the liberty to select any of the rating agencies. The following are the Ministry approved rating agencies:

• Investment Information and Credit Rating Agency of India Limited (ICRA)
• Onida Individual Credit Rating Agency of India (ONICRA)
• Credit Rating Information Services of India Limited (CRISIL)
• SME Rating Agency of India (SMERA)
• Brickwork Rating Agency
• India Ratings (earlier known as FITCH)
• Credit Analysis and Research Limited (CARE)

Rating Methodology

The rating methodology under the Performance and Credit Rating Scheme is a combination of credit and performance factors. The rating of the MSE units will be based on the following parameters:

• Operational
• Financial
• Business
• Management risks

A uniform rating scale is being followed by all empanelled rating agencies

Documents Required

The following documents required to be submitted along with the application form.

• SSI, EM-I, EM-II, UAN or UAM (Udyog Aadhaar Memorandum) Registration Certificate
• Partnership Deed, Memorandum and Article of Association
• Authority letter to sign the application
• List of all partners, directors with their age, address, Income Tax Return, qualifications and experience
• Copy of the audited accounts for the last three years (where accounts for the last year has not been audited provisional accounts duly certified by a Chartered Accountant along with two years audited accounts)
• In the case of a new project or expansion, copy of the project report containing a brief project profile, cost of project, source, means of finance.
• Document the products manufactured, marketing tie-up, end-users,  and orders in hand
• Details of subsidy, tax concession available to the applicant
• Quality certificates, export awards won membership of any associations