Agusto & Co. assigns a ‘Bbb’ rating to Baobab Microfinance Bank Limited with a Stable Outlook
The rating expires on 30 June 2021.
The rating assigned to Baobab Microfinance Bank Limited (“Baobab MFB” or “the MFB”) reflects the growing market share, strong support from owners, good capital ratios and a stable and experienced management team. However, the rating is constrained by concentration in placements, inadequate provision for loan losses, concentration and skew to time deposits in the funding base and the lingering effect of the COVID-19 pandemic on the microfinance industry and overall economy in Nigeria.
The MFB is majority owned by Baobab SA, which is headquartered in Paris France. Baobab MFB is part of the Baobab Group, which has operations in China and across Africa. The International Finance Corporation (IFC) owns a 15% stake in the MFB. Baobab MFB is licensed as a national microfinance bank by the Central Bank of Nigeria (CBN) and operates in six states in Nigeria and the Federal Capital Territory (FCT).
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