Agusto & Co. assigns a ‘Bbb-’ rating to Mainstreet Microfinance Bank Limited
The rating expires 30 June 2021
Agusto & Co. assigns a ‘Bbb-’ rating to Mainstreet Microfinance Bank Limited (“Mainstreet MFB” or “the MFB”). The rating is supported by adequate risk management processes, good liquidity, acceptable asset quality and the MFB’s stable and experienced management team. The rating, however, is constrained by low profitability, concentration in the funding base, high leverage and sizable exposure to unrated parties. The negative impact of the COVID-19 pandemic on the MFB’s loan book and income, and the weak macroeconomic environment are also rating concerns.
Mainstreet MFB was incorporated in 2008 as Afribank Microfinance Bank Limited, a wholly owned subsidiary of Afribank Plc. The MFB commenced operations in 2009 and in 2011 became Mainstreet Bank Microfinance Bank Limited following the Central Bank of Nigeria’s (CBN) intervention in Afribank Plc, which was renamed Mainstreet Bank Limited. Skye Bank Plc (now Polaris Bank Limited) acquired the Mainstreet Bank Group in 2014 and in 2018 divested of the MFB to the management team.
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