Performance and Credit Rating Scheme (PCR)

The Performance and Credit Rating Scheme helps small businesses evaluate and improve their overall performance and creditworthiness. It creates confidence among banks, buyers, and investors by providing an independent rating. This makes it easier to get loans and expand business opportunities.

Highlights

• Provides a combined evaluation of business performance and financial health.
• Encourages MSMEs to upgrade management, operations, and finances.
• Helps improve access to credit and market trust.
• Rating is valid for one year and available nationally through approved agencies.
• Since inception of the scheme in 2005 to March 2015, more than 1,10,828 units have been rated under the Scheme

What is a Performance & Credit Rating Scheme?

• The scheme was launched in April 2005. It was formulated by consulting  with Industry Associations, Indian Banks’ Association (IBA) and Rating Agencies
• The scheme provides rating or trusted third party opinion on the capabilities & creditworthinesses of MSMEs to promote credit access and to improve credit flow
• The scheme helps MSME understand their weakness and strengthen their organisation
• The scheme helps MSME improve their acceptability among banks, customers, buyers, and vendors.

Objectives

• Help MSMEs understand strengths and weaknesses to improve their operations 
• Enable easier and cheaper access to credit from banks/financial institutions.
• Boost MSMEs’ competitiveness and market credibility.
• Encourage adoption of best business and financial practices.

Benefits of Performance & Credit Rating Scheme for MSMEs

• Government Subsidy on Fees
  The government covers up to 75% of the rating fee, reducing your cost significantly.
• Better Access to Credit
  A good rating boosts your chances of getting bank loans faster and at better terms.
• Lower Cost of Credit
  Banks may offer loans at lower interest rates due to reduced risk perception.
• Improved Market Reputation
  A recognised rating builds trust among customers, suppliers, and investors.

Financial Assistance Under the PCRS Scheme for MSME

The government subsidises 75% of the rating fee based on the business turnover slab with ceilings:

The balance rating fee shall be paid by the MSME unit directly to the rating agency.

Eligibility for Performance & Credit Rating Scheme

You are eligible if:

• You are an registered MSME unit under MSMED act =
• You are looking to obtain performance & credit rated
• You an MSME, whether newly established or existing, engaged in manufacturing, services, or other sectors."

You are not eligible if:

• Your business is not registered as an MSME.
• You have any legal or fraud issues pending that affect credibility.

Documents Required for Performance & Credit Rating Scheme

• Business registration and license documents.
• Financial statements and audit reports.
• Details of business operations and management.
• Bank statements and existing loan documents.

Application Process for Performance & Credit Rating Scheme

You can apply:

• Offline by visiting the office of National Small Industries Corporation (NSIC) or the empanelled Rating Agencies.
• Online by filling the application form on the website of National Small Industries Corporation (NSIC), Indian Banks' Association (IBA), or the Rating Agencies.

Examples of Where PCRS Can Be Used

• Auto Part Supplier applies for rating under PCR scheme through CRISIL.With this trusted third-party opinion, the bank offers a loan at lower interest (8.5% instead of 11%).
• Food Processing unit approaches ICRA for a rating via NSIC. Based on the  rating, bank provides credit at reduced collateral requirements
• Coir manufacturing unit rated by CARE Ratings under PCR scheme. Now qualifies to supply to larger companies because higher rating shows reliable delivery capacity