Philippine Rating Services Corporation (PhilRatings) has assigned Global Dominion Financing Inc. (GDFI) an issuer credit rating of PRS A plus (corp.), with a stable outlook.
GDFI offers unsecured and secured credit facilities that meet the financial needs of businesses, especially small and medium-sized enterprises (SMEs), and individuals, without engaging in quasi-banking (QB) functions.
The Company primarily provides financing and refinancing of used cars and trucks, through its 78 branches nationwide.
GDFI aims to significantly expand its loan portfolio by strengthening its sales targets, hiring additional loan consultants and increasing the number of its authorized resellers in order to capture additional market share.
An issuer credit rating is a measure of a company’s general creditworthiness over a one-year period and a PRS A rating signifies that it has an above-average ability to meet its financial commitments against that of other Philippine companies.
The company, however, is somewhat susceptible to adverse changes in circumstances and economic conditions than higher rated companies. The more qualifies the rating awarded.
A stable outlook means that the rating should remain unchanged for the next 12 months.
In assigning the rating and its outlook, PhilRatings said it considered GDFI’s shareholder engagement, the company’s experienced management team, and its strong revenue generation due to aggressive loan book growth.
These rating qualities are offset by the significant challenges facing GDFI’s target market due to economic uncertainty and the immediate negative impact of the COVID-19 pandemic, and the high share of standard-grade loans. and below corporate standards relative to its loan portfolio.
According to the Department of Trade and Industry (DTI), more than half of the country’s micro, small and medium-sized enterprises (MSMEs) have had to shut down their activities due to the COVID-19 pandemic.
About 52.66% of MSMEs have completely stopped or closed their operations due to the health crisis, as of April 29, 2020. Some 12.55% of MSMEs had limited operations, while those who managed to continue their operations amounted to 34.79%.
PhilRatings notes that as of the end of March 2022, SMEs accounted for 61.0% of the company’s total loan portfolio.
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