FREQUENTLY ASKED QUESTIONS
Q. What does Credit Rating convey?
A. Credit Rating is an indicator of the company’s ability to meet its obligated
debt repayments. A symbol is usually assigned, to communicate a credit rating.
However, credit rating is not an advice to buy, hold or sell a debt instrument.
Q. What is Credit Rating process?
A. ONICRA ratings are based on comprehensive evaluation of government policies,
regulatory environment, industry scenario, management competency, market risks,
competitive position, balance sheet strength, liquidity position, cash flow
position and sensitivity to changes in operating environment.
Q. What are the eligibility criteria for NSIC-ONICRA
A. Any registered small scale industry (SSI) unit having investment in plant and
machinery up to Rs. 5Crore in case of manufacturing sector and Rs. 2 Crore in
case of service sector is eligible for rating.
Q. What is the validity for ONICRA rating?
A. NSIC-ONICRA rating is valid for one year from the date of issuance of the
Q. Is ONICRA offering any discounts on the rating fees?
A. In non NSIC scheme ONICRA does not offers any discount. However, under
National Small Industry Corporation Limited (NSIC) duly approved scheme MSME’s
get subsidy of 75% on the fees. They only have to pay 25% of the rating fees
which makes the rates competitive and affordable.
Q. Are audited financial statements important input for
A. An audit is done to ascertain the accuracy and correctness of financial
statements, therefore audited financials are an important input for credit
ratings. However, apart from audited financial statements other sources of
information and; industry inputs, comparative analysis and management
interaction are used to determine the rating of the firm.
Q. What does ONICRA do, in case if adequate information is
not provided by the issuers?
A. As limited information is available in the public domain in the Micro, Small
and Medium Enterprise (MSME) space, therefore ONICRA may not assign a rating if
the client does not provide sufficient information. Moreover, even in the above
case if ONICRA assigns a rating to the client, it would be conservative in its
Q. How does ONICRA maintains independence of Ratings?
A. The rating team functions independently of business development department.
Moreover, the ratings are based on comparative analysis and collective opinion
of the Rating Committee members.
Q. Benefits of Ratings?
Aids to deal with large companies
Helps in Marketing and serve as first
point to generate interest among potential trading partners
Provides a Tool for self correction &
Increases credit acceptability with
banks and financial institutions
Aids in getting concession in interest
rate on NSIC’s Raw Material Assistance / Bank guarantee (BG) Schemes
Creates confidence among buyers and
suppliers by establishing credibility & goodwill
Provides easy tool
for evaluating MSME’s
decision making process
Acts as a risk and
pricing assessment input
Q. What are the benefits in marketing/export?
A. Rating is accepted and recognized by buyers and suppliers. If you are
competing for a deal and you got your NSIC-ONICRA rating done then definitely
you will get advantage over competitors.