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Press Releases / 14.03.2013
Press Release as of 14.03.2013 Association MLC 'BSC of Kursk region' CJSC AK&M Rating Agency assigned a ‘B+’ microfinance institution rating, with a stable outlook, as per the national scale, to nonprofit organization "Regional centre of supporting small and middle enterprises". The ‘B+’ rating indicates that RCSSME qualifies as a sufficiently reliable borrower. Restructuring risk for a loan / part of a loan is relatively low. The nonprofit organization "Regional centre of supporting small and middle enterprises" is an element of the regional SME development infrastructure in Kursk region. Microfinance operations are one of the partnership’s activities provided for by its Charter. The microfinance institution’s rating is essentially supported by the high equity capital adequacy, zero debt burden, and its margin and average loan meeting the regulatory requirements. As of 1/1/2013, the microfinance institution’s SME-targeted capital amounted to RUB 41,435 thousand. Over its existence, RCSSME has never resorted to borrowed capital. Average loan (RUB 697.9 thousand) meets the Ministry of Economic Development’s recommended value (no more than RUB 700 thousand). The microfinance institution’s microfinance margin is 9.43% against the maximum acceptable percentage of 10%. The microfinance institution’s rating is essentially impaired by its failure to meet some of the regulatory authority’s recommended values, low number of the contracts concluded, and arrears on microloans. RCSSME’s lending performance is insufficient, with 21.8% of its lending capital placed as of 1/1/2013, while the MFI capital placement target recommended by Russia’s Ministry of Economic Development is at least 80% after the first full year in the market. Operational sustainability as of 1/1/2013 was unimpressive (56.8%), while the MFI operational sustainability target, also set by the Ministry of Economic Development, is at least 100% after two years in operation. Portfolio-at-risk as of the same date was 8.6%, the recommended value being no more than 7%. Therefore, three out of six parameters do not meet the regulatory requirements of the Ministry of Economic Development, which works against the rating. Another negative signal for the rating is the small number of contracts concluded: in 2012, RCSSME granted a total of 18 loans for RUB 12,160 thousand. Arrears on microloans are also exerting pressure on RCSSME’s rating. As of 1/1/2013, two microloans for a total of RUB 778,290 are overdue more than 360 days. Court proceedings aiming to recover the arrears from these borrowers and to foreclose on the collaterals for the respective contractual obligations are underway by decision of the arbitration court at the Kursk Chamber of Commerce and Industry.
Full name: Nonprofit organization "Regional centre of supporting small and middle enterprises". Short name: RCSSME. The microfinance institution has been operating on the basis of the nonprofit organization "Regional centre of supporting small and middle enterprises" since August 2010; registration entry no. 9110146000887 was made in the state register of microfinance institutions on December 15, 2011. Over its existence, the partnership granted 50 microloans for a total of RUB 24,260 thousand. The partnership is aimed to assist in creating a favorable development environment for SME businesses in Kursk region. NP Regional SME Support Center’s founders are as follows: the Consumer Market, Small Business Development and Licensing Committee of Kursk region, the Association of Private Transport Operators (Kursk regional public organization), the nonprofit organization Kursk Chamber of Commerce and Industry, the Association of Employers (Kursk regional public organization), the Kursk regional department of the Retail, Public Catering, Consumer Cooperation and Business Union of the Russian Federation “Trade Unity”.
This press release is based on the statement of assigning a microfinance institution credit rating, to the nonprofit organization "Regional centre of supporting small and middle enterprises". The credit rating, along with any information and conclusions provided in this press release, only conveys our opinion on the institution’s reliability and shall not be considered as advice on the purchase and sale of securities or the provision of loan facilities. CJSC AK&M Rating Agency will not incur any responsibility for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties. CJSC AK&M Rating Agency is a leading independent national rating agency engaged in rating activities since 1993. CJSC AK&M Rating Agency is accredited by the Ministry of Finance of the Russian Federation (order no. 452 as of September 17, 2010). AK&M Ratings are recognized by the Central Bank of Russia (for providing unsecured lending facilities – Regulation 323-P), Vnesheconombank (for granting subordinated loans) and SME Bank (for its program of lending to SME businesses), RUSNANO (when selecting banks to provide cash and settlement services to project and engineering companies implementing investment projects), and the MICEX (for the Corporate Bond Index / MICEX CBI and Municipal Bond Index / MICEX MBI calculation and bond listing purposes). By a resolution of Russia’s Government, AK&M Ratings count for the recapitalization of banks. Besides, AK&M Rating Agency is recognized by AHML and accredited by SRO National Securities Market Association.
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