RISK CLASSIFICATION BASED ON DISCRIMINANT ANALYSIS FOR SMES

Credit rating agencies specializes in analyzing and evaluating the creditworthiness of large corporate and issuers of debt securities. In the new financial architecture, credit rating agencies are expected to become more important in the management of both corporate and credit risk. Their role is limited to the large scale companies and multi corporations. Credit Rating Agencies focus was never on Small and Medium Enterprises where credit worthiness related information asymmetry is too large. On the other hand banks also handicapped by not having robust comprehensive models. To bridge the gap this research attempt has been made to provide solutions to the small and medium enterprises and banks.