Rating Release

Agusto & Co. hereby affirms the “Bbb+” rating assigned to Baobab Microfinance Bank Limited with a stable outlook.

The rating expires on 30 June 2025.

Agusto & Co. affirms the “Bbb+” rating assigned to Baobab Microfinance Bank Nigeria Limited (“the MFB” or “Baobab MFB”). The rating reflects Baobab MFB’s strong parental support from Baobab SA, low ratio of non-performing loans (NPLs), good liquidity profile and experienced management team. However, the rating is constrained by the MFB’s aggressive loan book growth which also constrains capital ratios, reliance on expensive time deposits and rising cost-to-income ratio. We have also considered the impact of the high inflation environment and stiff competition in the microfinance industry.

Baobab MFB is licensed by the Central Bank of Nigeria (CBN) as a national microfinance bank. The MFB provides services to individuals and micro, small and medium-sized enterprises (MSMEs) to promote enterprise and foster financial inclusion.  Baobab MFB has 38 branches spread across 15 states and the Federal Capital Territory (FCT).