The Nerve Desk

The Nerve Desk

Nigerian consumer lending startup secures credit rating ahead of defining year for fintechs

Nigerian financial technology company One Finance Limited (OneFi), the parent company of mobile lending platform, Paylater is ready for the big leagues. The company is the first African Fintech to secure a “BB” rating with a Stable outlook from leading emerging market focused ratings agency Global Credit Rating Co. (GCR).

OneFi’s rating comes as fintech companies increasingly compete in spaces erstwhile dominated by traditional financial services companies, especially in lending, where Nigerian banks have been cautious. The Central Bank of Nigeria (CBN) is also looking to regulate fintechs and is currently revising the Licensing Regime for finance providers and fintech platforms in the country, making the coming year a defining one for players in the space.

“This was the right time for OneFi to undertake the positive step of securing a credit rating score, as we work to build a legitimate, trusted lending brand,” said Chijioke Dozie co-founder and CEO of OneFi.

“We are now held to the same levels of transparency and scrutiny as other leading financial institutions in Nigeria,” Dozie added.

In arriving at its rating of “BB” with a Stable outlook, Global Credit Rating Co’s analysis found that OneFi is well capitalised vis-a-vis its current risk level, and also noted that the company currently has a low liquidity risk.

Dozie stressed the impact the process of securing the rating from Global Credit Rating has had on the company. “It has allowed us to scrutinise our finance and business models, as well as provide full transparency not only to our stakeholders, but to Paylater’s tens of thousands of customers across Nigeria.”

However, he said the work does not end here. “We are a young company, and the very first African fintech platform to be awarded with a credit score, and whilst we are pleased with our “BB” rating and Stable Outlook, which we believe fairly reflects our current standing, we are now focused on expanding our product offering, improving our asset quality, driving up customer loan applications and looking at ways in which we can bring our innovative approach to finance management to additional markets,” Dozie said.

The credit rating also puts OneFi in a better position to raise funds for future expansion, as it increases investor confidence in the company. So far, the company has raised $10.8 million funding over three rounds, including $10 million from South Africa-based Net1 UEPS Technologies, Inc. If the CBN ever ends up enforcing its licencing and shareholder fund requirements for fintechs, OneFi would be ready.