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Observations from the BIIA Forum 2011: Eliminating Asymmetries in Information through SME Ratings

Parag Patki, Managing Director of SMERA offered a different approach.  SMERA was initially set up as a rating agency to provide non-regulatory ratings on SMEs.  In the meantime SMERA is registered under the Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999 The initial challenges in setting up SMERA were the reluctance of lenders to provide default data, the lack of Information availability in the public domain and the submission of unreliable and insufficient data by SMEs.   

SMERA concentrates on building SME industry clusters and benchmarks which are used in the rating process.  It uses statistical modeling, expert rules, business analysis and industry trends to arrive at a particular rating.  Its rating model focuses on financial factors and other qualitative factors based on due diligence and site visits.

Since its foundation in 2005 it has been able to create a credible experience base.  To date SMERA has issued 9,000 SME ratings.  Its ratings go beyond financials by considering parameters specific to a geographic location.   As a next step SMERA considers the creation of a trade information exchange with suppliers of SMEs.

To access the SMERA presentation click on the attachment:  SMERA Patki 051110

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