"Overall we have rated more than 7000 companies. But in the SSI and SME sector we have rated close to 2000 companies last year. We expect this number to go up as there is lot of inquiries. We are educating the market more about the benefits," Vivek Mathur, Senior Group Vice-President, ICRA Limited.
"We are expecting that the number may increase by 20-25 percent," he told SME Times.
He added that there is a great awareness in the market about successful rating. Companies are coming forward to use credit rating benefits in order to get easy loan and negotiate on the interests' rates. Many of them are trying to understand how the credit rating can help them to grow their business.
"We feel that if they (small and medium companies) are evaluated by a third party, they will be in a position to get more funding," he added.
When asked about the present situation of fund requirement among the Micro, Small and Medium Enterprises (MSMEs), he said, the requirement of funding and working capital is high among MSMEs. It is only going up day-by-day.
The need of the hour is to understand where such funds should be utilised. Many companies are also getting themselves rated but they are not renewing it for the second time as they feel the rating did not benefit them, he mentioned.
Mathur added that at times banks do not only depend on credit rating report. They also ask for collateral, which creates difficulties for small and medium companies in terms of borrowing money from the banks.
The MSME sector contributes around 9% of GDP and accounts for around 45% of the manufacturing output at the moment. The sector has 3.6 crore thriving enterprises employing over 8 crore persons currently.