In ratings, the most important is the financials of the company and its credit history. Apart from these, lenders are looking at other sources of data, says Rajat Bahl, CEO, Brickworks Solutions at Assocham’s Bankers Borrowers Business Meet in Mumbai. SME borrowers typically have access to other sources of funds for paying back loans, and thus their NPAs tend to be lower than calculated. The addition of lots of borrowers who have been rated has reduced the median rating. However, only a third of the borrowers were renewing the ratings, as they got the 25 basis points benefit. Then the government gave a subsidy for rating, which led to another round of ratings. But the culture of rating never got built up. He proposed to banks that every time the SME gets a rating improvement, the bank should give some benefit to the borrower. That way he hopes to improve the culture of credit rating across the country.