FairMoney, a leading microfinance bank in Nigeria, has received an upgraded credit rating from Global Credit Ratings (GCR), Africa’s leading credit rating agency. The agency raised FairMoney’s long-term rating from BBB(NG) to BBB+(NG), while its short-term rating was upgraded from A3(NG) to A2(NG).
Henry Obiekea, Director of FairMoney Nigeria, attributed the upgrade to the microfinance bank’s consistent strategic performance. He said the improved rating came because FairMoney has successfully and consistently managed portfolio credit risk downwards without hurting margins, positioning it as a top earner in the microlending market. This operational success is further supported by high customer demand and high-volume loan disbursement.
Obiekea further highlighted that over the last three years, FairMoney has not only managed risk effectively but has also continued to diversify its offerings, now including loans to small and medium-scale businesses. This strategic expansion and effective risk control are key factors recognized by GCR.
The upgrade reflects significant improvements in the Nigerian microfinance sector and specifically reinforces FairMoney’s strong industry position. Global Credit Ratings (GCR) highlighted several core strengths supporting the higher rating, including scale and efficiency, where FairMoney benefits from its vast scale, advanced proprietary technology, and efficient operational structure. furthermore, financial strength was noted by GCR due to the company’s consistent earnings, strong cash flow generation, and flexible funding structure, which is reinforced by support from its parent company, Predictus SAS. Regarding performance metrics, FairMoney delivered a strong financial performance in the 2024 fiscal year, reporting operating revenue of N112.3 billion.
Despite the inherent competitive challenges in portfolio quality within the microlending sector, GCR recognized FairMoney as a top player in Nigeria. The institution’s ability to maintain its market position stems from leveraging its technology, high transaction volumes (with more than 10,000 daily loan requests and disbursements), and strong brand recognition.
FairMoney’s overall credit profile is further supported by its robust cash generation, modest debt levels, and a stable, low-cost customer deposit base.
The Stable Outlook reflects Global Credit Ratings’ (GCR’s) expectation that FairMoney will continue to improve its portfolio quality over the next 12 to 18 months, which is anticipated due to three main factors: improved risk assessment, as the company is increasing its use of internal and external data for stronger customer risk assessment; product diversification, represented by a gradual expansion into secured lending; and macroeconomic stability, stemming from a more stable macroeconomic environment in the region.
GCR anticipates that FairMoney will strengthen its market share, diversify its earnings base, maintain its Net Interest Margin (NIM) below 80%, and sustain current levels of operational cash flow and leverage.
“GCR’s decision to upgrade our ratings is a strong endorsement of the FairMoney platform. It highlights the strength of our business model, our solid financial performance, and our commitment to effective credit risk management,” Obiekea concluded.