By Esther Agbo
Agusto & Co. has upgraded the rating of Credit Direct, the consumer finance arm of FCMB Group Plc, to BBB+. This upgrade comes on the heels of the company’s successful completion of its Series I and II Commercial Paper payouts.
Agusto & Co. highlighted, “The upgrade reflects Credit Direct’s dominant position in the industry and its good and consistent profitability, which compares better than most peers in the consumer lending segment.”
In a recent statement, Credit Direct’s Managing Director/CEO, Chukwuma Nwanze, expressed pride in the upgrade saying, “We are honoured and proud to announce that Agusto & Co. has upgraded Credit Direct’s rating to BBB+, a remarkable achievement considering the high inflationary and turbulent macroeconomic environment we are navigating.
“This upgrade, which puts us among the highest rated fintech lenders in the country, is not only a testament to our robust financial health and strategic agility but also reflects our resilient business model focused on expanding financial inclusion for Nigerians, our sound risk management practices, and the trust we have built with our customers and stakeholders.”
Nwanze also commented on the strong investor confidence demonstrated through the participation in the N6.9 billion Series I and II commercial paper, which was issued in November 2023 on the FMDQ Securities Exchange.
“Their support underscores our position as one of Nigeria’s leading digital-first non-bank financial services providers.
“We extend our deepest gratitude to our investors for their trust, and we remain dedicated to delivering exceptional value and fostering long-term partnerships that are critical to achieving our ambition to expand financial inclusion for all Nigerians.”
However, in the first half of 2024, Credit Direct reported a 105 percent year-on-year growth in interest income, leading to a 154 percent increase in profitability compared to the same period last year.
Chief Financial Officer, Kolawole Omoniyi, emphasised the company’s continued growth despite a challenging business climate.
He said, “We also continued to see significant improvements in our cost efficiency and asset quality ratios, as our cost-to-income ratio declined by 370 basis points while our NPL ratio also declined by 221 basis points as of the end of H1 2024.
“Our return on average equity improved to 65.6 percent while our return on average assets also improved to 10.5 percent, wrapping up a strong H1 2024 financial period.”
Beyond financial metrics, Credit Direct has made significant strides in digital transformation.
“Our strong performance in the first half of 2024 is a clear indication of the transformative power of our digital initiatives. Our commitment to digital transformation has significantly enhanced our operational efficiency, improved the customer experience, and boosted employee productivity,” Nwanze noted.
By the end of June 2024, 95 percent of the company’s loan book originated through digital channels, a significant increase from 62 percent in June 2023.
The company introduced four new digital channels and upgraded existing ones, ensuring 24/7 access to its services.