Coface is launching an assessment tool for Russian SMEs: the ‘Coface Credit Rating’ (CCR). This new tool is the result of cooperation between Coface and the Association of Russian Banks (ARB), completed as part of a joint venture (National Rating Agency Coface-ARB) founded in September 2005 to develop projects of this nature.
The CCR is intended for banks, insurance companies and public bodies with major risk portfolios and faced with the issue of assessing the creditworthiness of Russia’s small- and medium-sized businesses. This area of the country’s regionally-based companies is particularly problematic.
This rating system is now operational and the very first rating has been issued. CCR provides an effective tool for these economic players as it enables them to monitor changing trends in Russian SMEs’ creditworthiness. The CCR makes it possible to assess a Russian SME’s ability to meet its short-term financial commitments (rating at 12 months), as well as the impacts of any additional indebtedness on its payment behaviour.
For example, with this tool, a bank can determine a range of the risk it is taking on when granting a loan to an SME.
Jome Cazes, Coface’s CEO, points out that “Coface has a solid experience in corporate ratings as, since 2000, it has been developing a global @rating system that currently covers 50mn companies worldwide”.
In addition, he adds that Coface has an in-depth understanding of Russia’s economic fabric through of its company information and receivables management subsidiary, Coface IGK RUSS. Accordingly, Cazes believes that “the CCR represents a logical step in Coface’s expansion strategy on this high-potential market”.
Coface has other projects in the pipeline for Russia. During 2006, it plans to launch credit insurance offerings to both Russian and French companies present in the country to enable them to expand their activities at minimal risk, both nationally and internationally.
Russian authorities hold the CCR in high esteem, as they understand its usefulness for encouraging the development of their SMEs.
The SMEs themselves are already displaying keen interest in having better access to financing.
As Garegin Tosunyan, chairman of the Association of Russian Banks stresses, “this initiative forms part of my institution’s objective to help Russian banks develop their risk management expertise by offering them a modern credit risk assessment tool”.
Andrey Kolyagin, the CEO of NRA adds, “The CCR project is the result of close cooperation with several leading Russian banks, including Vneshtorgbank and the Russian Development Bank.”