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Mauritius ratings firm gets Kenya entry go-ahead

Paul Muthaura
Capital Markets Authority (CMA) chief executive officer Paul Muthaura speaks during the launch of the Capital Markets Soundness Report quarter 4 2018 at the authority offices in Nairobi on February 1, 2019. PHOTO | SALATON NJAU  

Mauritius-based Care Ratings (Africa) Private Limited (Craf) was last week cleared to offer credit rating services in Kenya, becoming the fourth player in the fledgling industry.

Capital Markets Authority (CMA), the regulator, said the firm 78 percent owned by Care Ratings Limited of India, will evaluate creditworthiness of issuers of securities and assign ratings to such securities.

“We welcome the registration of Care Ratings Africa cognisant of the opportunities it will create, to leverage Care India’s experience and track record in Kenya’s capital markets,” CMA chief executive Paul Muthaura said in a statement.

Craf is also licensed in the same capacity by Financial Services Commission Mauritius and recognised by Bank of Mauritius as an External Credit Assessment Institution.

Craf is publicly traded on Indian National Stock Exchange and Bombay Stock Exchange.

The firm, the second-largest credit rating agency in India, had credit rating deals worth $1.6 trillion (Sh160 trillion) as at 31 March, 2018.

“Craf will receive operational support from Care Ratings to ensure it has adequate resources to provide quality credit opinions for financial instruments.

This is informed by a name licence and technical Assistance agreement entered into between the subsidiary and its majority shareholder,” CMA said in a statement.

Craf will also receive ratings methodologies developed by CARE Ratings. The shareholder will also provide “back office support” with regards to best international compliance functions.