SMERA gets ADFIAP Award

Posted: Wednesday, Jun 06, 2007 at 0045 hrs IST
Updated: Wednesday, Jun 06, 2007 at 0045 hrs IST

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: The Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) has awarded SIDBI with "Outstanding Development Project Award" for setting up SMERA. When the Small Industries Development Bank of India (SIDBI) took the initiative of setting up a dedicated rating agency called the SME Rating Agency of India Ltd. (SMERA), to enhance credit flow to credit-constrained SME sector, it was first of its kind in the world. The novelty, importance and relevance of this initiative have now become a buzzword in the small and medium as well as the banking sector. The award was given under the SME Development Category and announced during 30th ADFIAP Annual Meeting held on May 10, 2007 at Hanoi, Vietnam. This award is a recognition of the Indian initiative in developing its SME sector and is likely to be replicated in other developing countries. The mandate of SMERA is to contribute to the creation of an enabling environment to facilitate flow of fair-priced quality credit to the SME sector. Rajesh Dubey, CEO, SMERA said that this endeavour of the rating agency is to demonstrate the benefits of transparency for SMEs and continue its efforts to create 'knowledge' on the sector which could be used by all stakeholders for better appreciation of the problems and prospects of the sector. Since its inception about a year and a half year ago, SMERA rated over 600 SME units and has in pipeline more than 900 entities in a sector where the rating penetration is particularly low. SMERA has entered into MOUs with 20 banks to rate their SME clients. Several banks have already issued circulars to pass on softer interest rates to SMEs appropriately rated by SMERA. SMERA has also been accredited by NSIC as an eligible institution for routing subsidy to SSI units opting for ratings. The Union Budget 2007-08 has also recommended banks to consider rating of SMEs in determination of the interest rates. SMERA has also pioneered risk profiling of SME clusters in its effort to facilitate stepping up the credit flow to SMEs.

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