Moody’s acquires GCR to compete with DataPro, Agusto in Nigerian credit rating market

Moody’s, the world’s leading rating agency, says it is acquiring a 51-percent stake in Global Credit Rating Company Limited (GCR).

GCR has operations in various African countries, including Nigeria, South Africa, Senegal, Kenya, and Mauritius.

“GCR’s ratings play a significant role in the growth of Africa’s financial markets by providing critical insights into credit across a range of economies and sectors,” Rob Fauber, President & Chief Executive Officer of Moody’s, was quoted: “By combining GCR’s successful domestic operations with Moody’s global expertise, we have a unique opportunity to expand Moody’s presence in a high-growth region.”

In Nigeria, analysts see the move as aimed at helping Moody’s gain access into the domestic credit rating industry to compete with leading players, including DataPro and Agusto.

While Agusto was historically seen as market leader, DataPro has in recent times issued more credit ratings in the Nigerian market, including its incursion into the Fintech and asset management segments of the market, where investors hitherto had less visibility.

Speaking with the Chief Executive Officer of DataPro, Mr Abimbola Adeseyoju, he said:  “We are aware of the intention of Moody’s to enter the Nigeria and broader African market through an acquisition and this reinforces our outlook on the prospect for deepening the credit market in Africa, especially Nigeria, where we believe there is significant scope of enhancing the depth and penetration of the credit market and broader financial services sector.

“The imminent entrance of peers like Moody’s also validate DataPro’s recent collaborative initiatives with different stakeholders in opening up new markets for ratings and advancing it as a tool for enhancing governance, compliance and operational efficiencies in African corporate institutions, while also furnishing investors with fact-based evidence on the credibility and general fundamentals of Issuers and their issued securities.

“We are leveraging technology and partnerships in advancing our practice, and we are confident on the results thus far, as reflected in our expanded coverage and depth of our services. As you know, rating service is a renowned offering, guided by regulations and global standards, and we have always aligned with the global best practice, irrespective of circumstances of our domestic environment and market conditions.”

This week, DataPro launched its weekly newsletter aimed at improving investor education and utilisation of credit ratings as a tool for investment decisions. “Hence, we welcome new developments that may add value to the Nigerian financial market and catalyse the impetus for new offerings that can increase efficiency in capital allocation and resource mobilisation towards achieving sustainable growth of the Nigerian economy,” Mr Adeseyoju added.

He explained that DataPro is not driven by competition, because the rating business, if properly aligned, is driven by complementarity. “We give our opinions. We are not selling a product,” he said.

Interestingly, Credit Ratings in Nigeria remains an oligopoly play, with only three active players; Agusto & Co., DataPro Ratings and Global Credit Ratings (GCR), licensed by the Securities and Exchange Commission (SEC), the apex regulator for the capital market.

Moody’s coming into the Nigerian market is a pointer to the fact that, “There is something going on here,” says Adeseyoju, who adds that, “People are beginning to recognise the efforts we have put into the market over the years and the prospects that are ahead.”