Frequently Asked Questions

What is a Credit Rating?

A credit rating is an opinion on the creditworthiness of an individual, corporation or even a country. It is an evaluation of a borrower's overall credit history. Credit rating also evaluates the borrower's ability to repay debt, which is determined after a detailed assessment of the various quantitative and qualitative parameters. Credit rating conveys the probability of the subject's ability to repay a loan or obligation to the lender or the investor. However, in recent years, credit ratings have also been used for other purposes including adjusting insurance premiums and determining employment eligibility.

How is SME rating by SMERA different from other rating agencies?

SMERA derives its expertise from its promoters, namely: SIDBI (, Dun & Bradstreet ( and 11 other shareholder banks, both in the public and private sector; these shareholder banks have significant experience in the MSME segment. SMERA has developed a pioneering and customized rating model suiting the MSME sector that takes into consideration applicants' business and financial profile, nature of industry and the business environment. SMERA's technical and equity partner, Dun & Bradstreet, has built the rating model for SMERA by using its proprietary database of 2,50,000 Indian MSME entities and its rich experience of over 165 years in the credit rating space. This is the most important factor that distinguishes SMERA Ratings from ratings of other agencies, who are largely into rating of equity issues/ debt papers/bonds of large corporate, institutes, banks etc.

Who can avail of SMERA Rating?

All types of MSMEs involved in manufacturing, service or trading activities can approach SMERA, either directly or through bankers, for availing the rating services.

How can MSME units approach SMERA for rating?

MSME units interested in availing of SMERA's rating services can visit SMERA's website ( and forward their request to [email protected] , post which, the unit will receive an application form and a checklist of documents to be submitted for availing of SMERA services. Alternatively, the unit can download the rating application form available on the website and forward the same with the requisite fees and required documents (as mentioned in the checklist of documents) in duplicate to the nearest SMERA office.

Do the MSME units desirous of availing rating services necessarily have to approach through banks?

MSME units can directly approach SMERA or even banks can forward their requests for rating MSMEs unit from SMERA; the choice is entirely left to the unit or its banker. However, in cases where the MSME unit directly approaches SMERA, the rating certificate of such unit and the rating report is provided to the MSME unit. In cases where the banker applies to SMERA for rating of a MSME unit, the rating certificate will be dispatched to the unit but the rating report will be mailed to the referring bank.

What are the advantages of getting rated by SMERA?

Leading banks have equity stake in SMERA with representation on the Board of Directors. SMERA has also entered into MOUs with 29 banks and financial institutions with 11 banks and lending institutions providing commercial benefits to well rated SMERA units. In order to facilitate extension of monetary as well as non-monetary benefits to well rated SMERA units, member banks and SMERA have mapped their respective rating models to draw comfort from SMERA rating process and parameters. Based on SMERA Ratings, the investment grade SMERA units have enjoyed preferential treatment from lenders; similarly, better rated units are also known to have enjoyed access to faster credit on better terms or enhancement of credit. Similarly, SMERA Ratings provide alternate opinion on the unit and additional comfort while lending. Further, SMERA Ratings can enhance MSME unit's market standing amongst its trading partners and potential customers, both in the domestic as well as international market.

What is the validity of SMERA's rating?

The rating is valid for a period of one year from the date of issue, subject to there being no significant changes or events occurring during that period which could materially affect the business and financial profile of the organization or the project. Hence, it is recommended that units renew their ratings on yearly basis.

What will be the turnaround time (TAT) for MSME units?

The TAT is 30 working days from the date of submission of complete information.

Will the ratings be reviewed or monitored automatically by SMERA?

No, the ratings so assigned will be reviewed by SMERA only on the request of the MSME unit or the referring bank. The ratings are not automatically reviewed or monitored.

Will the ratings be displayed on SMERA's website?

Yes, all accepted ratings will be displayed on SMERA's website.

Do all banks accept SMERA Ratings?

Almost all banks accept SMERA Ratings and this is facilitated by MOUs that SMERA has entered into with these banks.

Will SMERA Rating replace the internal rating of the lending institution?

No, SMERA Rating will not replace the internal ratings of the lending institution.
MSME units, by and large, have to bear higher interest rates as compared to large entities. Lending institutions arrive at a representative interest rate based on their internal ratings and many MSME borrowers are unaware of their internal ratings and if aware, they are ignorant of the basis of arriving at such ratings. An external rating from SMERA would make the MSME borrowers aware of their rating and the basis of arriving at the rating from an external perspective, thus providing them with a competitive advantage. This awareness could also enable the MSMEs to improve their internal rating and endeavour to enjoy better terms from the lender fraternity.

Are SMERA ratings tools for improvement?

Yes, as SMERA ratings enable the MSME units to have a greater understanding of its strengths, weaknesses and risk factors, the ratings act as tools for self-improvement.



  • Aids in enhancing the credibility of the MSME unit.
  • Helps open doors to the corporate sector, especially for MSMEs having a large vendor base.
  • Facilitates international trade and commerce by building confidence amongst potential trading partners.
  • Motivates MSMEs in adopting good governance practices for long term benefits.
  • Serve as a tool for self evaluation and improvement.
  • Enables entry in D & B's largest B2B global database of over 162 million business records.

Contact Us

Mr. Virendra Goyal
Business Development, Small & Medium Enterprise
E: [email protected]
T: +91 22 6714 1177
M: +91 99300 74009

T: +91 22 6714 1177