April 22: The Nepal Rating Agency Company (NRA) has submitted an application in the Securities Board of Nepal (SEBON) seeking approval to operate as a credit rating agency on Thursday. If SEBON grants the permission, it will be the second company to be established as credit rating agency in the country.

American credit rating company ‘Dun & Bradstreet’ has invested 75 percent in the purposed credit rating agency NRA. The American company is financing 60-65 percent in the proposed agency. The remaining percentage will be financed by Saket Poddhar who will become a management representative from the American company. According to Credit Rating Regulations 2068, any company looking to operate in Nepal should have at least 25 percent investment of foreign credit rating company. Due to the lack of skilled manpower for credit rating agency in Nepal, SEBON has made mandatory provision of investment from foreign credit rating companies. Furthermore, NRA will obtain 20-24 percent investment from Nepali commercial banks and remaining will be invested by former Banker Anal Raj Bhattarai.

“NRA is the planned outcome of 16 years of partnership with Dun & Bradstreet,” says Bhattarai, adding, “We are planning to exercise new ideas through the company.”  According to him, the company will also focus on credit rating of customers and organisations along with financial equipments.

“Customers will be provided Dun Identity number which will facilitate them to take loans not only from domestic banks but also from international lenders,” he says. He also informs that customers will be provided required trainings on tax and preparing proper balance sheets. SEBON will provide official approval after evaluating and inspecting infrastructure of such companies.

Earlier, two other companies had planned to establish credit rating Company in Nepal. BiD Invest in collaboration with Indian company Care India had planned to open Nepal Investment and Credit Rating Agency with investments from Crane Rating Company and another Indian company Brickwork Ratings. However, both companies have not forwarded the process for years. Similarly, some Nepali entrepreneurs have also prepared to establish a credit rating company.

Meanwhile, SEBON citing the existence of single credit rating company in Nepal, recently also made its plan public to give approval to insurance companies to open credit rating agencies. SEBON is preparing to amend the regulation regarding the capital requirement of insurance companies to allow them for operating credit rating agencies. As per the proposed amendment of bylaws, insurance companies are required to have paid-up capital of Rs 2 billion while the credit rating companies needs to have Rs 20 million in paid-up capital.