Subsidiary of Dun & Bradstreet South Asia Middle East Limited (DNBSAME), Bangladesh Rating Agency Limited (BDRAL) is involved in rating the SMEs of Bangladesh and collecting and verifying data for DNBSAME’s Business Information Report (BIR) for overseas businesses under the correspondent service agreement for export of service from Bangladesh.
Applying for a loan! You need to get your personal financial strength or your company rated to increase the chances for loan approval with a better interest rate. And that’s not the only reason for you to get your company rating. It also helps in many other ways, ensuring that SMEs are able to understand and organize their finances efficiently, enabling them to move up the value chain.
“We believe that the industry in which an SME operates has a direct bearing on the overall performance of the SME, and therefore, rate them based on the industry benchmarks. In last one year BDRAL has rated 220 cases for apparel, clothing retail and wholesale businesses, out of which 70 were readymade garment manufacturing companies, while the other 150 were rated for RMG-related industries (such as tailors, boutique houses, backward items, dyeing and washing plants),” says Sayed Javed Ahmad, Chief Operating Officer of The Bangladesh Rating Agency Limited (BDRAL), a subsidiary of Dun & Bradstreet South Asia Middle East Ltd. A pioneer in rating the SME sector in Bangladesh, BDRAL considers a number of parameters of the enterprise and regulations, and industry-specific dynamics for rating small and medium enterprises.
Considering that most of the companies that BDRAL rates fall under the small and medium enterprises section, considered as an unorganized sector, a majority of them lack the required financial practices to run a business successfully. “As most of the SMEs don’t follow the procedure of maintaining requisite documentation, we do it for them. Collection of relevant data and documents is followed by physical investigation which in turn is followed by analysis of the case by a team of specialists,” explains Ahmad, about the entire rating process which on an average takes 7-10 days to complete.
Besides rating SMEs, BDRAL is also involved in investigating, collecting and verifying data of local clients for Business Information Reports (BIR) for Dun & Bradstreet, popularly known as D&B worldwide. “It is basically a survey that we carry out on behalf of Dun & Bradstreet for the overseas business houses,” maintains Ahmad, who explains that when a foreign buyer explores options to do business with a Bangladeshi RMG manufacturer, he/she wants to cross check and verify all the information through a third-party before getting into any business relationship. “We have a fixed format… The team assigned for BIR activities does the background check, investigates and verifies information and sends the data back to Dun & Bradstreet, to be given to the client as a complete report,” concludes Ahmad.Since no other licensed authority is physically investigating the data, the authenticity of the rating is much higher. “SMEs who are rated by us also get a good standing with the buyers who checks the companies’ financial standing before they show intent to work with the companies,” informs Sayed.
Who are the SMEs?
The SMESPD Circular No. 4, dated 14th July 2015, issued by the Bangladesh Bank, defines Small and Medium Enterprises in terms of the value of fixed assets with replacement cost excluding land and building, or in terms of the number of persons employed as under:
Category | Industry Type | Value of Fixed Assets (Tk.) |
Number of Persons Employed |
Medium | Manufacturing | 1000 – 3000 Lacs | 100 – 250 |
Service | 100 – 1500 Lacs | 50 – 100 | |
Trading | 100 – 1500 Lacs | 11 – 50 | |
Small | Manufacturing | 50 – 1000 Lacs | 25 – 99 |
Service | 5 – 100 Lacs | 10 – 49 | |
Trading | 5 – 100 Lacs | 6 – 10 |