Difference between revisions of "SME Credit Rating Scale"
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Latest revision as of 22:35, 25 June 2019
Definition
An SME Credit Rating Scale is a classification framework that helps assign SME debtors to one of a finite set of rating states, capturing in a simplified way their Creditworthiness.
SME versus Corporate Rating Scale
An SME Scale may have significant differences from a corporate Credit Rating Scale, reflecting the specificities of SME Lending such as
- collectively defined credit risk (pooling)
- preponderance of higher risk buckets
- different sensitivity to macro-economic factors
Issues and Challenges
- For institutions operating multiple types of business or investors in diverse credit portfolios it may be difficult to compare different credit rating scales
