MSME - Rating

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    MSME Rating

    Performance and Credit Rating

    Presentation by

    Shailesh Waghmare

    Head Marketing - SME

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    About ONICRA

    Independent corporate body incorporated in 1993, an established player in Performance

    and Credit Rating in Indian market

    The only organized platform in India for individual credit risk assessment / management

    and Information exchange

    Acknowledged as pioneers of Individual Credit Rating in the Economic Survey of

    India 1993-94issued by Ministry of Finance, Government of India

    A Government accredited Rating Agency for MSMEs, by Ministry of MSME through

    National Small Industries Corporation (NSIC) and recognized by Indian Banks

    Association (IBA), for Financial and Performance Rating

    National Skills Registry (NSR) Certified Employment Background Screening agency

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    Snapshot

    Technology Services Network

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    Business to Business Services

    B2B

    Delivering rating reports

    of individuals to our

    clients in Banking,

    Insurance and Telecom

    segments, helping them

    in taking credit decisions

    Comprehensive Credit &

    Performance Rating Reportto MSME units have helped

    them in increasing their

    Acceptability & Credibility

    with Vendors, Suppliers,

    Banks & Financial

    Institutions, etc.

    Background Checks

    (including Identity,

    Professional,

    Educational, Criminal,

    Health or Reference

    Checks) have helped our

    clients to reduce the risk

    of employee frauds

    Financial & PerformanceRating reports help our

    clients to Indentify the

    right channel partners

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    ONICRAs Experience

    The following factors have differentiated Onicra from the rest in the Industry:

    Coverage:

    We have a nationwide network of 150 inter connected Offices, covering over 400

    Locations.

    Synergy:

    Onicra officials across India have worked in close co-ordination with the Large

    Corporates Zonal/Regional Offices and Branches to reach out to the Vendors.

    Activity Level:

    We have actively conducted Vendor Cluster Meetings, Seminars, Awareness

    Programs, etc where existing and prospective Vendors have been educated on the

    benefits and requirement of Rating.

    Focus:

    Our keen interest on Vendor Ratings as a Business Vertical within the Company has

    brought in innovativeness of strategy and speed of action.

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    ONICRA Advantages

    Rated over 6000 Associates / Vendors / MSME Units

    Rated among top 2 agencies for MSME Rating in India

    One of the fastest growing Credit Rating agency with approx 100% growth YOY

    MoU with 24 leading Banks and Financial Institutions including PSU Banks,

    State Financial Corporations, Regional Banks, Rural / Gramin Banks, etc.

    Empanelled with Navel Dock Yard, Mumbai

    Lowest Turn Around Time (TAT) in the industry

    Nationwide infrastructure to meet the ever-growing needs of our customers, covering

    400 locations

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    Working Relationship with Banks & FIs

    1. Bank of Rajasthan

    2. Bank of India

    3. Punjab National Bank

    4. Allahabad Bank

    5. United Bank of India

    6. Union Bank of India

    7. Central Bank of India

    8. State Bank of Mysore

    9. State Bank of Hyderabad

    10. State Bank of Travancore

    11. Tamilnad Mercantile Bank

    12. Punjab & Sindh Bank

    13. Andhra Bank

    14. Karur Vysya Bank

    15. Oriental Bank of Commerce

    16. UCO Bank

    17. Andhra Pradesh State Financial Corporation

    18. Karnataka State Finance Corporation

    19. Jammu & Kashmir Bank

    20. IDBI Bank

    21. Citizen Cooperative Bank

    22. Pachim Banga Gramin Bank

    23. Orissa State Financial Corporation*

    24. Assam Gramin Vikas Bank

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    MSME

    Rating

    Services

    NSICNSIC ONICRAONICRA

    PERFORMANCE & CREDIT RATING FOR Micro &PERFORMANCE & CREDIT RATING FOR Micro &

    Small EnterprisesSmall Enterprises

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    Introduction

    NSICNSIC ONICRAONICRA PerformancePerformance && CreditCredit RatingRating SchemeScheme:: Comprehensive Credit &Performance Rating Report to MSME units have helped them in increasing their Acceptability

    & Credibility with Vendors, Suppliers, Banks & Financial Institutions, etc.

    Understanding the urgency faced by the MSME units, Ministry of MSME, Government of India

    through National Small Industries Corporation (NSIC) has signed a Memorandum of

    Understanding with us to provide Performance and Credit Rating services. The scheme was

    launched by the Honorable Finance Minister and is approved by Indian Banks Association(IBA). The Ministry of MSME is offering a subsidy of 75% on the ONICRA Rating Fee.

    Scheme Features:Scheme Features:

    Turnover based Fee Structure Turnover based Fee Structure

    Rating Approved by

    Indian Banks Association (IBA)Scheme implemented through

    National Small Industries Corporation (NSIC)

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    Benefits of ONICRA Rating to MSMEs

    Adds credibility to the status of the MSME

    Helps to deal with large companies

    Motivation to adopt good governance practices

    Help in Marketing and serve as first point to generate interest among

    potential trading partners

    Tool for self correction & self improvement

    Increases credit acceptability with banks and financial institutions

    Concession in interest rate on NSICs Raw Material Assistance / BG

    Scheme

    Creates confidence among buyers and suppliers by establishing credibility &

    goodwill

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    Value Proposition for MSMEs

    Benefitsof NSIC

    OnicraRating

    CreatingAwarenes

    s

    Confidence

    amongstBuyers &Suppliers

    RiskManagement

    IncreasedProductivit

    y

    Acceptabili

    ty withBanks &Financial

    Institutions

    Enhancesacceptability withbanks, lenders

    and financial

    institutions. This

    gives fast access

    to credit at low

    interest rates.

    Highlights strengths

    and weaknesses of the

    existing operations

    and recommends

    corrective measures.

    Awareness is created about the

    strengths, weaknesses, opportunitiesand threats. This helps in identifying

    areas where improvements are needed.

    Credibility and

    goodwill isestablished while

    undertaking

    business

    transactions.

    Highlights parameters

    measuring operational,

    financial, business and

    management risks.

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    Value Proposition Banks & FIs

    Second Opinion - Third Party unbiased opinion

    An additional input to make lending decisions

    Comfort level for a prudent decision-making

    Reduction in information asymmetry in the MSME sector

    Warning signals through periodic rating review

    Focus can be driven towards exposure on low risk accounts

    Cost and time effective method of processing

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    Rating Scale

    Performance

    Capability

    Financial Strength

    High Moderate Low

    Highest SE 1A SE 1B SE 1C

    High SE 2A SE 2B SE 2C

    Moderate SE 3A SE 3B SE 3C

    Weak SE 4A SE 4B SE 4C

    Poor SE 5A SE 5B SE 5C

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    Rating Process

    Pre Site Visit

    Submission of list of the required documents to the applicant for the rating process

    Agreement for a suitable date for the site visit

    Site Visit

    Meeting with the applicant along with the structured questionnaire (this questionnaire includes thebasic details of the applicant along with their family background, existing business, risk takingcapacity, synergy in the business)

    Feedback from existing Bankers through Bankers questionnaire

    Factory inspection

    Assessment of the assets employed, working conditions, process flows, etc.

    Collection of documents, not yet collected

    Post Site Visit Reference Check

    Customer Satisfaction verification

    Supplier Feedback

    Financial Analysis

    Submission of Analysis to Rating Committee

    Approval of Analysis & Assignment of Rating

    Generation of Final Report

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    Detailed Process Flow

    Request for

    Rating

    Financials +

    Other info

    Pre-Analysis Formalize

    Assignment

    Login with

    NSIC

    Rating Appealed Publish Rating Institution advised on

    draft report

    Draft Report & Rating

    Proposal

    Rating Committee

    Industry Data

    Additional

    Information

    In depth

    Analysis

    Meet

    Institution &

    Site Visit

    Detail

    Questionnaire

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    Documents Required

    SSI Registration Certificate

    Partnership Deed or Memorandum & Articles of Association

    List of all directors or partners with their age, address, net worth, income tax return, qualifica