Partners of the Bank of Baroda Care Ratings to assess the credit quality of SMEs
MUMBAI: state owned Baroda Bank On Friday, he said he has signed a pact with Care Ratings to assess the credit quality of its small and medium-sized business (SME) customers.
The rating agency will evaluate the credit quality of the bank's existing and potential SME customers.
"Our tie-up with Care Ratings will strengthen the evaluation process and enable growth of the SME lending business," Baroda Bank executive director Vikramaditya Singh Khichi said.
The biggest challenge for SMEs has been the availability of financing, said Care Ratings executive director Mehul Pandya.
If they do not receive financial support from banks, they usually tend to resort to the savings or loans of the promoter of family and friends. We hope this partnership helps identify companies that help the growth history of the country of tomorrow, he said.
Care Ratings will evaluate SMEs by processing and analyzing structured, unstructured and new data flows.
It will also indicate the relative credit quality of SMEs based on an eight-point scale, where 1 indicates the highest credit quality and 8 - poor credit quality.
"Increased digitalisation of the economy, the availability of new data sources such as the GST, in addition to traditional financial data and non-traditional data sources, allow for new approach for grading of SMEs. This MoU with Baroda Bank is a step in this direction," Pandya added.