Total funds granted under Government Schemes:

As on May 31, 2016, cumulatively 24,31,490 proposals from micro and small enterprises have been
approved for guarantee cover for aggregate credit of Rs.1,13,500.61 crore, extended by 119 active
MLIs.
A. Operational Highlights of CGTMSE Scheme:
1. Guaranteed approval growth position

Period No. of Active MLIs No. of Credit Amount of Guarantees Cumulative

Facilities Approved Approved (Rs. Crore) Guarantee
s Approved
(Rs. Crore)

FY 2012-13 117 288537 16062.48 52600.07

FY 2013-14 117 348475 18188.12 70026.28
FY 2014-15 119 403422 21274.82 90445.90
FY 2015-16 119 513978 19949.38 108990.85
FY 2016-17 * 119 106634 4037.07 113500.61

2. MLI approvals Gujarat

3. Sectoral approval Gujarat
Under NCGTC (Figures till 28/02/2017)
1. Credit Guarantee Fund Scheme for Education Loan
2. Credit Guarantee Fund Scheme for Skill Development

3. Credit Guarantee Fund Scheme for Factoring

4. Credit Guarantee Fund Scheme for Micro Units

5. Credit Guarantee Fund Scheme for Stand up India
Credit Guarantee
What is it?
Credit rating is an estimate of the credit worthiness of an individual or organization
i.e. borrowers potential of repayment of debt. It is done by a third party credit
evaluator and reflects SMEs capability of debt management. Rating is arrived after
considering various financial, non-financial parameters, past credit history and
future outlook with respect to economy and the sector in which the MSME is
operating or would like to operate
Typical Rating process:
Typically the entire process starting from information receipt to assignment of rating
takes two to four weeks. A typical rating process comprises of following:
1. Request for Rating by MSME
2. Submission of Financial and Managerial Information
3. Finalizing the Assignment and Detailed Questionnaire
4. Site Visit and Discussion with Management
5. In-Depth Analysis, Industry Research and Draft Report
6. Proposed Rating before Rating Committee
7. MSME Advised on Rating
8. Appeal before Rating Committee
9. Publishing of Final Rating
Documents Needed to Obtain a Rating *
SSI registration certificate/Entrepreneurs memorandum
Memorandum & Article of Association
Audited accounts of last three years
Project report containing project profile, cost of project, financing structure
(For new projects only)
Details of insurance for plant, machinery etc.
Details of product line, technical & distribution/marketing collaboration (if
any), end user segment, order in hand etc.
Details about plant set up, equipment/machinery, scheduling etc.
Tax concession, subsidy available (if any)
Nature of advance & security provided, in relation to the loan/credit facility
available from banks
Quality certification, any award won, export details
Bankers report indicating details of transaction between MSME & bank
(confidential)
Usage and Validity of Credit Rating Reports
Assigned ratings are typically valid for a period of one year from the date of issue,
subject to there being no significant changes/events occurring during that period
which could materially affect the business and financial parameters of the
organization/project. It is generally recommended that units renew their ratings on
yearly basis.
The assigned ratings can be used for the following purposes:
Submitting to the bank, lender, and financial institution for establishing credit
worthiness
In negotiating collateral requirement, terms of loan and interest rate
Establishing credibility in the eyes of buyers, suppliers, technical
collaborators, JV partners
To identify the strengths/weakness of company and areas of improvement
To identify the best practices prevailing in the industry
Establishing contacts with foreign business partners
MSME Ratings Myth and Reality
Myth 1: Lenders and banks often rate MSMEs low due to their small size and non-
standardized procedures.
Reality: As per CRISIL data, there has been a healthy number of companies with
considerable business strength underpinned by the leadership of first generation
entrepreneurs who had built strong brands and demonstrated the ability to
withstand competition, including from large global players. They have got high
ratings and are able to obtain finance at concessional rates.

Myth 2: MSMEs do not typically provide credible financial and non financial business
information.
Reality: MSMEs perceive tangible benefits from obtaining ratings and are hence
willing to provide the required information. In addition, there is a sizable number of
MSMEs who have transactions with large domestic and foreign players and have a
history of maintaining high quality financial and business information. These SMEs
often obtain high ratings.

Myth 3: For MSMEs, a rating is just a tool for availing favorable terms from lenders.
Reality: The rating is a report card for MSME businesses indicating their strengths
and their weaknesses. It helps the MSME identify its position vis--vis its
competitors and its areas for improvement. Moreover, a rating does not
automatically translate into a benefit. It is only a tool and its effectiveness depends,
say, on how it is effectively utilized in its negotiations with business partners. It
holds the potential to facilitate rich dividends.

Myth 4: Ratings obtained by an SME can replace the internal rating of the lending
institutions
Reality: Ratings provided by agencies will not replace the internal ratings of lending
institutions. Lending institutions arrive at a representative interest rate based on its
internal ratings. Many MSME borrowers are un-aware of their internal ratings and if
aware, they are ignorant of the basis of arriving at such ratings. An external rating
from rating agencies would make the MSME borrower aware of his rating and the
basis of arriving at rating from an external perspective, thus providing him with a
competitive advantage. This awareness could also enable the MSMEs to improve its
internal rating and endeavor to enjoy better terms from the lender fraternity.
The Agencies facilitating Credit Ratings are:
Small and Medium Enterprises Rating Agency (SMERA)

SMERA a joint initiative by SIDBI, Dun & Bradstreet Information Services India
Private Limited (D&B) and several leading banks in the country. SMERA is the
country's first Rating agency that focuses primarily on the Indian MSME segment.
SMERA has completed 7000 ratings.

CRISIL

CRISIL is the largest credit rating agency in India. It was established in 1987. The
worlds largest rating agency Standard & Poor's now holds majority stake in CRISIL.
Till date it has rated more than 5178 SMEs across India and has issued more than
10,000 SME ratings.

CARE Ratings

Incorporated in 1993, Credit Analysis and Research Limited (CARE) is a credit rating,
research and advisory committee promoted by Industrial Development Bank of India
(IDBI), Canara Bank, Unit Trust of India (UTI) and other financial and lending
institutions. CARE has completed over 7,564 rating assignments since its inception
in 1993.

ONICRA Credit Rating Agency

ONICRA was established in 1993 by Mr. Sonu Mirchandani as a rating agency. It
analyzes data and provides rating solutions for Individuals and Small and Medium
Enterprises(SMEs). ONICRA has an extensive experience in operating a wide range
of business processes in areas such as Finance, Accounting, Back-end Management,
Application Processing, Analytics, and Customer Relations. It has rated more than
2500 SMEs.
Fitch Ratings
Fitch Ratings is a global rating agency committed to providing the world's credit
markets with independent and prospective credit opinions, research, and data. Fitch
Ratings is headquartered in New York and London and is part of the Fitch Group.
ICRA
ICRA was established in 1991 by leading Indian financial institutions and commercial
banks. International credit rating agency, Moodys, is the largest shareholder. ICRA
has a dedicated team of professionals for the MSME sector and has developed a
linear scale for MSME sector which makes the benchmarking with peers easier.

Benefits of MSME Ratings

Independent third party evaluation about credit worthiness: It
provides a stamp of quality from independent renowned agencies.
Better access to funding: It enhances acceptability with banks, lenders
and financial institutions and helps to obtain credit at a cheaper rate at a
faster pace. It reduces collateral requirement and simplifies lending terms.
Confidence among value chain partners: A rating helps to establish
credibility among buyers, suppliers and collaborators. It helps to negotiate
better terms and conditions with other stakeholders.
Benchmarking: The rating helps the MSME to identify its position vis-a- vis
its competitors in terms of financial and non financial parameters. It helps in
benchmarking and provides scope for further improvement.
Brand Building: Rating by an independent agency improves the visibility of
MSME in the eyes of various stakeholders like buyers, suppliers,
collaborators/JV partners etc.
Interest rate benefits: Some Banks/FIs give interest rate rebate to the
MSMEs rated by SME Rating Agency of India Ltd.(SMERA)

Credit Bureau
Commercial Credit Bureau is an organization that collects credit information from
various sources and provides consumer credit information on commercial
consumers for a variety of uses. It maintains a repository of information that
contains credit history of commercial borrowers. It helps lenders assess credit
worthiness, the ability to pay back a loan, and can affect the interest rate and other
terms of a loan. It provides information in the form of a Credit Information Report. It
is a factual report on of a borrower's credit payment history compiled from
information received from different credit grantors.
In India, CIBILs Commercial Bureau banks on a vast information database of credit
histories of commercial borrowers. In its initiative to improve Credit flow to SMEs,
CIBIL is being supported under SME Financing and Development Project
implemented by Project Management Division, SIDBI, with an aim to facilitate flow
of credit to the under penetrated SME sector while increasing banks profitability
and market penetration (via sound credit decisions) and reducing non-performing
loans (via credit information tools).

It Credit Score contains the following information:

Basic borrower information such as:

Name and Address

D-U-N-S Number
Other Identification numbers; e.g. PAN, Registration No.
Legal constitution
Relationship details; e.g. major shareholders, directors and their addresses and D-U-
N-S Number
Number of inquiries made on the borrower

Account Details:

Number of credit facilities

Credit type
Loan amount
Outstanding amount
Asset classification
Willful defaulter and suit-filed status
Guarantor details

Importance of Credit Score

A clean credit history improves the credit worthiness of Borrower.
 It enhances acceptability with banks, lenders and financial institutions.
It helps to obtain credit at a cheaper rate at a faster pace.
It reduces collateral requirement and simplifies lending terms.
Methods to Improve credit rating
On time repayment

By modifying inaccurate information regarding delayed repayment/

nonpayment of credit. It should be done with credit grantor and credit grantor will in
turn notify CIBIL.

CapitaWorld online lending market place has been developed to bring the lenders to
your doorstep. The platform can be used to meet all kind of loan requirements,
corporate as well as retail. Broadly the loan category include:
Corporate
1. Term Loan
2. Working Capital
3. LC
4. BG
5. Other
Retail
1. Home Loan
2. Car Loan
3. Education Loan
4. Personal Loan
5. Unsecured Loan
6. Loan Against Property
7. Loan Against shares
We are one stop solution for all kinds of funding requirement, as an MSME our
platform assists you with:
1. Preliminary assessment of proposals ensuring deserving borrowers get the
guarantees
2. Credit rationing
3. Assist in reducing information asymmetry
4. Multiple lending institution parameter linked thus loan proposal can be shared
with multiple organisation, reducing the response time and increasing the
chances of availing credit quickly
- Description of each Product (features, eligibility, purpose, players, tenure,
indicative rates etc.) to be shown - Somnath
- Which are the normal reasons for rejection of loan at Retail / Corporate Level -
Somnath
- Which are the normal criteria for acceptance of a Retail / Corporate loan
Somnath
- Which are the key aspects to be for society education to ensure that all those
taking payments / salaries in cash should be switching to cheque so that they
become eligible for funding from Bank / NBFCs - Somnath
- How to switch loans from current interest structure to the new structure - Somnath
- Which are the key parameters in Sanction letter that one should take into
consideration - Somnath & Mudit