Nigeria’s fastest-growing Credit Rating Agency, DataPro, recently reaffirmed its commitment to deepening the understanding of credit ratings by training media professionals on the often-overlooked qualitative factors that influence credit ratings.

Speaking during the opening session of the annual training, Prince Oladele Adeoye, Executive Director at DataPro, emphasised the importance of building a bridge between credit rating agencies and the media. “This year, we are focusing on understanding qualitative factors in credit rating considerations,” he noted. “It is part of our ongoing effort to not just rate institutions but also educate the ecosystem in which they operate.”

The training aligns with the Securities and Exchange Commission’s (SEC) mandate for Capital Market operators to promote public education. According to Adeoye, “The media is at the frontline of shaping public perception. If journalists understand the language of credit ratings, they can better inform the public and prevent misinformation.”

Beyond the Numbers: Why Qualitative Matters

While many view credit ratings as heavily reliant on financial ratios and hard numbers, Adeoye stressed that qualitative drivers are equally—if not more—critical. These include Corporate Governance practices, Management Integrity, Regulatory Compliance, Business Reputation, and the Macroeconomic Environment.

“A lot of people think ratings are just number crunching,” he explained. “But qualitative insights—like leadership history, ethics, and market behaviour—can tip the scale in rating decisions. These may not appear significant at first glance, but when aggregated, they tell a compelling story about risk.”

Understanding Ratings: More Than Just Grades

A credit rating is an independent opinion on the creditworthiness of an Issuer, be it a Government or a Corporation. Ratings fall broadly into two bands: investment grade (from BBB- to AAA) and non-investment grade (often referred to as “junk”). Entities within the investment-grade zone enjoy better access to capital at lower costs, while those below are seen as riskier and often pay higher interest rates to attract investors.

However, a Rating is not static. It is accompanied by outlooks (e.g., positive, stable, or negative) and may change based on evolving business conditions. “The rating has a shelf life, typically 12 months,” Adeoye said. “We constantly monitor the operating environment of rated entities.”

The Media’s Critical Role

The session highlighted how the media often plays a silent but powerful role in the rating process. Investigative reporting, historical coverage, and public records can unearth reputational red flags that companies may not voluntarily disclose.

Adeoye cited an example: “A director who ran a company aground years ago could resurface under a new entity. The only way to catch such patterns is through diligent background checks—often aided by the media’s archival work.” This underscores the need for synergy between rating agencies and the media. “Journalists help build the transparency and accountability ecosystem we rely on,” he added.

Ultimately, DataPro’s initiative aims to instil a credit culture that prioritises integrity and caution in market participation. When ratings are well understood, both investors and issuers are more likely to act responsibly, boosting confidence and stability in the financial system.

“This is about more than just training,” Adeoye concluded. “It is about building a better-informed media, a more accountable Capital Market, and a healthier economy in Nigeria.”