FairMoney’s Careful Approach Sets a New Benchmark for Fintech in Nigeria

FairMoney Achieves Higher Credit Rating, Reinforcing Its Leadership in Nigeria’s Digital Lending

FairMoney Microfinance Bank has further established itself as a prominent force in Nigeria’s digital lending landscape after Global Credit Ratings (GCR) elevated its credit standing. The bank’s long-term national issuer rating improved to BBB+(NG) from BBB(NG), while its short-term rating advanced to A2(NG) from A3(NG), both with a stable outlook.

This positive reassessment, alongside a reported annual operating revenue of N112.3 billion in 2024, highlights FairMoney’s robust financial health and operational strength in a sector often characterized by instability and heightened risk.

Key Factors Behind the Upgrade

• GCR cited FairMoney’s steady profitability, strong cash flow, and adaptable funding model—backed by its parent company, Predictus SAS—as central reasons for the improved rating.
• Over the last three years, the bank has successfully lowered its portfolio credit risk while maintaining profitability, a testament to its disciplined approach to risk management. CEO Henry Obiekea regards this as proof of the company’s effective strategies, especially in Nigeria’s challenging microfinance environment where unsecured loans and economic pressures often result in high default rates.

Technology-Driven Growth and Diversification

FairMoney’s advanced technological platform is central to its achievements. The bank processes more than 10,000 loan applications each day, utilizing AI-driven credit scoring systems that evaluate customer behavior, transaction patterns, and other relevant data. This enables swift, informed lending decisions and helps keep non-performing loans to a minimum.

Expanding into SME financing has also broadened FairMoney’s revenue base and supports its mission to promote financial inclusion. By serving customer segments often overlooked by traditional banks, FairMoney has become a vital contributor to Nigeria’s evolving financial sector.

Sector-Wide Impact and Future Outlook

• GCR’s rating upgrade reflects not only FairMoney’s progress but also broader positive trends within the microfinance industry. The agency highlighted the bank’s strong brand presence, efficient deposit collection, and conservative debt levels as factors supporting its stable credit profile.
• With a growing focus on secured lending and the adoption of advanced risk assessment tools, FairMoney is well-positioned to enhance its portfolio quality and expand its market share in the years ahead.
• The stable outlook from GCR signals confidence in FairMoney’s ability to withstand macroeconomic headwinds such as currency volatility and inflation, while continuing to deliver strong financial results.

Setting New Standards for Nigerian Fintech

FairMoney’s recent achievements mark a shift in how fintech companies in Nigeria are evaluated. While African tech startups have traditionally been measured by growth and fundraising milestones, FairMoney’s upgraded rating underscores the importance of financial discipline and institutional credibility—qualities that are increasingly valued by both investors and regulators.

According to GCR, FairMoney’s capacity to secure capital on favorable terms and its contribution to strengthening Nigeria’s financial infrastructure make it a benchmark for sustainable and scalable fintech innovation.

Broader Implications for the Industry

This rating enhancement sends a strong message to international investors: Nigerian fintech firms can attain investment-grade ratings through sound governance and technological innovation. As Nigeria seeks to close financial inclusion gaps and diversify its economy, FairMoney’s example demonstrates how rapid growth can be balanced with prudent risk management. As the sector continues to mature, such standards are likely to become crucial for attracting institutional investment and building confidence in emerging markets.