Rating Release

Agusto & Co. hereby affirms the ‘Bbb+’ rating of LAPO Microfinance Bank Limited.

The rating expires on 30 June 2022

Agusto & Co. hereby affirms the “Bbb+” rating assigned to LAPO Microfinance Bank Limited (“LAPO MFB” or “the Bank”). The rating is supported by LAPO MFB’s adequate capitalisation, low leverage, good liquidity and funding profile, dominant market position and experienced management team. The rating is, however, constrained by the Bank’s high non-performing loan ratio, which was accentuated by the adverse impact of the COVID-19 pandemic on LAPO MFB’s asset quality, deficiencies in the credit appraisal process and concentration in the ownership structure. The adverse impact of the COVID-19 pandemic on the general level of economic activities in Nigeria has also been considered.

LAPO MFB is the largest of nine national microfinance banks in Nigeria. The Bank was incorporated as a limited liability company in 2007 and obtained the Central Bank of Nigeria’s (CBN) approval to operate as a state microfinance bank in 2010. In 2012, LAPO MFB acquired a national microfinance licence, authorising operations in Nigeria’s 36 states and the Federal Capital Territory (FCT) Abuja.