CARE Ratings Partners with APRM to Revolutionize African Finance

CARE Ratings (Africa) Private Ltd, the leading credit rating agency in Mauritius and a subsidiary of CARE Ratings Ltd, has signed a memorandum of understanding with Africa Peer Review Mechanism (APRM), an autonomous entity responsible for promoting good governance.

The goal of this agreement is to join forces in the development of credit risk assessment in Africa, expanding opportunities for economic growth, particularly on the African continent.

The APRM’s mandate falls within the African Union (AU) policies to help member states improve their credit ratings.

This support for the development of national financial markets includes promoting a conducive environment for the establishment and growth of national rating agencies, increasing the number of rated countries and instruments, accelerating the development of local capital markets, and enhancing governments’ access to affordable capital.

The AU aims to collaborate with credible institutions of systemic importance to foster consistent economic integration, including the establishment of a pan-African Credit Rating Agency (AfCRA), in line with Article 19 of the AU Constitutive Act of 2002.

This collaboration involves, among other things, working together on creating AfCRA to provide objective and accurate assessments of African countries, facilitating access to financing at competitive rates, and supporting the development of local capital markets.

Impartial and credible credit risk assessments in Africa could be beneficial for investors and institutions, providing valuable information for informed investment decisions.

“With the creation of AfCRA, we are promoting transparency and confidence in the continent’s financial markets, paving the way for new investment opportunities and sustainable growth,” said Mehul Pandya, CEO and Managing Director of CareEdge Group.

To date, sovereign risk ratings in the AU are assigned by three major international rating agencies.

However, it is apparent that the nuances of developing countries and African realities are not fully explained.

CareEdge Group, with its expertise, will help develop methodologies and models for sovereign ratings, taking into account the complexities and dynamics of emerging economies.

CARE Ratings (Africa) Private Limited was established by CareEdge Group in 2014 and is licensed by the Financial Services Commission of Mauritius and the Capital Markets Authority of Kenya, bringing over three decades of expertise.

The agency is well-positioned to support the development of capital markets in Africa. By evaluating sovereign ratings of 40 countries, including seven African countries in addition to Mauritius, CareEdge Ratings aims to significantly contribute to market transparency and credibility.

Source: l’Express