Nigerian fintech company, MyCredit Investments Limited (FairMoney), has seen its long-term rating elevated from BBB(NG) to BBB+(NG) by the Global Credit Ratings (GCR), Africa’s leading credit rating agency. Concurrently, its short-term rating has been upgraded from A3(NG) to A2(NG). The outlook for FairMoney's ratings has been maintained as Stable.
This rating upgrade is attributed to notable improvements within the Nigerian microfinance sector and serves to underscore FairMoney's robust standing in the industry. These strengths are bolstered by the company's significant scale, its adoption of advanced technology, and its commitment to operational efficiency.
GCR specifically acknowledged FairMoney's consistent earnings generation, its strong capacity for cash flow generation, and a flexible funding structure. This structure is further fortified by the support received from its parent company, Predictus SAS.
In parallel, FairMoney has reported a strong financial performance for the 2024 fiscal year, announcing operating revenue of NGN 112.3 billion.
Henry Obiekea, the Nigerian director for FairMoney, commented on the upgraded rating, stating, "Over the last three years, the company has consistently managed its portfolio credit risk downwards without hurting margins."
He further highlighted FairMoney's leading position in the microlending market, a status supported by high customer demand and a substantial volume of loan disbursements. The company has also been actively diversifying its product offerings, now extending loans to small and medium-scale businesses.
GCR has also noted that despite facing competitive challenges related to portfolio quality, FairMoney continues to be a prominent player within Nigeria's microlending sector.
The FairMoney team asserts that they have continued to harness the power of proprietary technology, manage high transaction volumes—receiving and disbursing over 10,000 loan requests daily—and leverage strong brand recognition to enhance financial accessibility across Nigeria.
FairMoney's robust cash generation capabilities, coupled with modest debt levels and a stable, low-cost customer deposit base, continue to contribute positively to its overall credit profile.
The Stable Outlook issued by GCR reflects the agency's expectation that FairMoney will continue to enhance its portfolio quality over the coming 12 to 18 months. This outlook is supported by several factors, including the company's increasing reliance on both internal and external data for more robust customer risk assessment, its gradual expansion into secured lending, and the anticipation of a more stable macroeconomic environment.
GCR anticipates that FairMoney will succeed in strengthening its market share, diversifying its revenue streams, maintaining its Net Interest Margin (NIM) below 80%, and sustaining its current levels of operational cash flow and leverage.
Obiekea concluded by stating, "GCR’s decision to upgrade our ratings is a strong endorsement of the FairMoney platform. It highlights the strength of our business model, our solid financial performance, and our commitment to effective credit risk management."