Agusto & Co. hereby upgrades the rating assigned to Baobab Microfinance Bank Nigeria Limited to a ‘Bbb+’
The rating expires on 30 June 2023.
Agusto & Co. hereby upgrades the rating assigned to Baobab Microfinance Bank Nigeria Limited (“the MFB” or “Baobab MFB”) to a ‘Bbb+’ on the basis of improved profitability and a better risk management framework. The rating reflects Baobab MFB’s good profitability, strong parental support, adequate capitalisation, low leverage and competent and experienced management team. However, the rating is constrained by the MFB’s reliance on expensive tenored deposits, concentration in funding and high cost of risk. We have also considered the global and domestic economic landscape and the attendant impact on households and businesses.
Baobab MFB is part of the Baobab Group, which has operations in China and across eight other countries in Africa. The MFB provides loans and savings products to micro, small and medium-sized enterprises (MSMEs) to promote enterprise and reduce poverty. As at 31 December 2021, Baobab MFB had total assets of ₦24.9 billion.