SME in Bangladesh and Credit Rating Scoring on SME by Credit Rating Agency of Bangladesh Limited

Abstract

This internship report presents a comprehensive overview of my practical experience at the Credit Rating Agency of Bangladesh Ltd. (CRAB), focusing particularly on the assessment and rating procedures applied to Small and Medium Enterprises (SMEs) in Bangladesh. Throughout the internship, I gained firsthand exposure to how CRAB evaluates the creditworthiness of SME clients using a structured and standardized methodology. The report highlights the role of SMEs in Bangladesh’s economic development and describes CRAB’s analytical framework, which integrates qualitative and quantitative parameters to determine an enterprise’s credit rating. The study places special emphasis on the credit rating assessment of Karim Motors, an SME engaged in motorcycle trading as a distributor of Bangladesh Honda Private Limited. Using CRAB’s SME rating methodology, the report evaluates the firm’s business operations, financial performance, management structure, and banking relations. Based my experience, the findings and analysis indicate that Karim Motors maintains strong management capability, satisfactory business growth, strong internal banking relationship, and adequate profitability, leads to Karim Motors an overall score that reflects an adequate credit quality rating (SE-3). The internship also gave the opportunity to work with the rating scoring models, learn about the rating process and get to know clients, as well as see ratings through from start (document collection) to finish (sending for report and senior review), involving an entire industrial chain including facilitation making. It was an amazing experience which helped me to solidify my practical knowledge of credit rating mechanism, SME risk assessment and compliance with Basel framework in the context of banking sector in Bangladesh.