Rating Release
Agusto & Co hereby upgrades the rating assigned to CapitalSage Technology Limited to “Bbb+”
The rating expires on 30 June 2024.
Agusto & Co hereby upgrades the rating assigned to CapitalSage Technology Limited (“CapitalSage” or “the Company”) to “Bbb+”. The rating upgrade is upheld by the sustained improvements in the Company’s net earnings and cash flows on the back of the sturdy demand for its service offerings and its expanded operating scale. The rating also considers CapitalSage’s low leverage metrics supported by its improved equity buffer following steady profit accretion to retained earnings and its qualified and experienced management team. However, the rating is moderated by the Company’s inadequate working capital position due to the continuous investments in network infrastructure for its payment applications and Point-of-Sale (POS) terminal, the potential margin pressures amid the frail macroeconomic environment in Nigeria and the intensifying competition in the agency banking and payment services segments of the FinTech market.
CapitalSage Technology Limited commenced operations in 2014 to provide loans to the informal sector but subsequently changed its business service offerings to agency banking and third-party payments. CapitalSage has a presence in all 36 states of the country through its network of agents and merchants. The Company also has footprints in five other African countries, with plans to expand its service offerings to other countries in the medium term. As at the end of 2022, CapitalSage Technology Limited had a network of 56,118 agents (2021: 30,554 agents) and 2,709 merchants (2021: 2,093 merchants), while the number of users of its payment platform stood at 1,117.
The opinions expressed in this rating release do not represent any investment or other advice and should therefore not be construed as such. Visit www.agusto.com for further information.
