New Delhi, : In a move aimed at strengthening the growth prospects of small businesses, engineering exports promotion body EEPC India has urged the government to introduce a separate credit rating framework for Micro, Small and Medium Enterprises (MSMEs), arguing that the current system often places them at a disadvantage.
The industry body has highlighted that MSMEs are frequently assessed against large corporate players in their respective sectors, making it difficult for smaller enterprises to secure investment-grade ratings despite their operational strengths and growth potential.
According to EEPC India, the absence of a dedicated rating mechanism limits MSMEs’ access to affordable credit, as lower ratings often result in higher collateral requirements and increased borrowing costs. This, in turn, affects their ability to expand operations, invest in innovation, and compete effectively in domestic and global markets.
The proposal calls for a separate evaluation framework that benchmarks MSMEs against businesses of similar size and scale rather than large industry leaders. Such a system, industry representatives believe, would provide a more accurate assessment of an enterprise’s financial health and business performance.
A dedicated rating model could significantly improve access to finance for thousands of small businesses, which form the backbone of India’s manufacturing, exports, and employment ecosystem. Easier access to credit would enable MSMEs to strengthen productivity, create jobs, and contribute more effectively to the country’s economic growth.
Industry stakeholders have also suggested that a specialised framework, developed in consultation with regulators and rating agencies, could help build greater confidence among lenders while ensuring fairer treatment for smaller enterprises.
As India seeks to strengthen its manufacturing and export capabilities, policymakers are increasingly focusing on measures that improve the ease of doing business for MSMEs and unlock their growth potential.
