Agusto & Co. hereby assigns a “Bb+” rating to DavoDani Microfinance Bank Limited with a stable outlook

Rating Release

Agusto & Co. hereby assigns a “Bb+” rating to DavoDani Microfinance Bank Limited with a stable outlook

The rating expires on 30 June 2024.

Agusto & Co. hereby assigns a “Bb+” rating to DavoDani Microfinance Bank Limited (“DavoDani MFB”, “the MFB” or “the Bank”). The rating reflects DavoDani MFB’s good profitability, adequate capitalisation and experienced management team. However, the rating is constrained by the MFB’s high ratio of non-performing loans (NPLs) to gross loans, concentration in the deposit base, rapid loan book growth in a period of economic stress and considerable reliance on expensive tenored funds in a rising yield environment.

DavoDani MFB is licensed by the Central Bank of Nigeria (CBN) to operate as a state microfinance bank in Lagos State. The MFB provides services including short-term loans to small businesses operating in the Nigerian trade and commerce sector.