Credit Direct Finance Company Limited (Credit Direct), the consumer finance arm of FCMB Group Plc and one of Nigeria’s leading digital-first non-bank financial services providers, has recently received an upgrade to its credit rating from Agusto & Co. to BBB+.
According to Agusto & Co., “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.”
Chukwuma Nwanze, Managing Director/CEO of Credit Direct, commented on the upgrade of the Company’s credit rating by Agusto & Co, saying,” We are honored 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”.
Furthermore, Credit Direct announced the successful payout of its N6.9 billion Series I and II commercial paper issued in November 2023 on the FMDQ Securities Exchange. Nwanze thanked the investor community for participating in the series I and II commercial papers saying “The strong investor confidence demonstrated through their participation and 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 is critical in achieving our ambition to expand financial inclusion for all Nigerians.”
Commenting on the financial performance of the business in the first half of 2024, Kolawole Omoniyi, the Chief Financial Officer at Credit Direct explained that the company is continuing its growth trajectory despite a tough business clime. Omoniyi stated “we delivered a strong financial performance in 2023 and have continued the momentum in the first half of 2024. In our H1 2024 unaudited financial performance, we achieved a 105% YoY growth in interest income. This helped to raise our profitability by 154% in the first six months of the year compared with the corresponding period last year. We also continued to see significant improvements in our cost efficiency and asset quality ratios as our cost to income ratio declined by 370bps while our NPL ratio had also declined 221bps as at end of H1 2024. Our return on average equity improved to 65.6% while our return on average assets also improved to 10.5% wrapping up a strong H1 2024 financial period.”
Beyond the strong financial performance, the company reported that it had also made significant progress in its digital transformation implementation to ensure that the company is ready for the future.
Nwanze explained that “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 customer experience, and boosted employee productivity. About 95% of our loan book at the end of June 2024 were originated through our digital channels, a significant improvement from the 62% reported as of June 2023. We introduced four new digital channels and upgraded our existing digital channels, enabling our customers have 24/7 access to our services”.
Nwanze emphasized that digital transformation initiatives such as the deployment of self-service loan origination channels, automated customer profiling and credit decisioning have contributed to improved asset quality and a reduced cost-to-income ratio, even in the face of high inflation.
Credit Direct expects to build on this momentum in H2 2024 and deliver even greater value to its customers, and stakeholders. Its focus remains driving financial inclusion and providing innovative financial solutions to meet the evolving needs of its customers.
