Source - LSE Regulatory
RNS Number : 9611I
ASA International Group PLC
18 August 2021
 

 

ASA International Group plc July 2021 business update

Amsterdam, The Netherlands, 18 August 2021 - ASA International, ('ASA International', the 'Company' or the 'Group'), one of the world's largest international microfinance institutions, today provides the following update of the impact of COVID-19 on its business operations as at 31 July 2021.

·    Liquidity remains high with approximately USD 116m of unrestricted cash and cash equivalents across the Group.

·    The pipeline of funding deals under negotiation totalled approximately USD 151m.

·    With the exception of India, Sri Lanka, Myanmar, Sierra Leone and Uganda, all other operating companies achieved collection efficiency of more than 95%.

·    India collections slightly improved to 58% despite lockdowns in most states following the second wave of COVID-19 affecting the whole country.

·    Sri Lanka collections improved significantly to 76% after nationwide lockdown in June.

·    Collections in Myanmar declined to 59% due to a two weeks' holiday announced by the government, which is associated to a rapid and severe increase of COVID-19 infections.

·    Uganda collections dropped to 83% due to nationwide lockdowns caused by the second wave of COVID-19.

·    Portfolio quality remained challenging, particularly in India, with benchmark PAR>30 for the Group, including off-book loans and excluding loans overdue more than 365 days, increasing to 16.5% from 14.8% in June 2021, and PAR>90 unchanging.

·    The Group's operating subsidiaries, excluding India, the Philippines and Myanmar, collectively have been able to maintain PAR>30 at 3.5%.

·    Disbursements as percentage of collections exceeded 100% in 4 countries with much lower percentages seen in India, Sri Lanka, Uganda, and Rwanda due to amongst others lockdowns and other COVID-19 related restrictions.

·    The number of clients remained around 2.5m, while Gross OLP decreased to USD 442m (8% higher than in July 2020 and 3.6% lower compared to June 2021), predominantly caused by the declining loan portfolio in India.

·    The moratoriums granted in June amounted to USD 46.6m, primarily due to a loan restructuring of certain distressed clients in India as per the Reserve Bank of India ('RBI') guidelines.

Health impact of COVID-19 on staff and clients

 

·    The immediate health impact of COVID-19 on the Company's operations increased with 342 of over 12,500 staff members confirmed as infected since March 2020, with two deaths. Since March 2020, confirmed infections amongst 2.5m clients increased from 7,262 at the end of June 2021 to 11,330 as at 31 July 2021, resulting in 296 deaths since the start of the pandemic. Of the 296 client deaths across the Group, 35 are from India, with 3 of those deaths occurring in July 2021 and 193 are from Myanmar, with 187 of those deaths occurring in July 2021.

 

Funding

·    Unrestricted cash and cash equivalents remained high at approximately USD 116m.

·    The Company secured approximately USD 9m of new loans from local and international lenders in July 2021.

·    The majority of the Company's USD 151m pipeline of future wholesale loans are supported by (agreed) term sheets and/or draft loan documentation. The terms and conditions of the remaining loans are being negotiated with lenders.

·    As mentioned in the June 2021 business update, the Group is exploring the possibilities to raise some local (Indian) equity capital to strengthen the balance sheet of ASA India, in view of the increasing amount of ECL provisions in India. 

Collection efficiency until 31 July 2021(1,2)

Countries

Jan/21

Feb/21

Mar/21

Apr/21

May/21

Jun/21

Jul/21

India

82%

84%

87%

87%

67%

55%

58%

Pakistan

98%

99%

99%

99%

99%

99%

99%

Sri Lanka

97%

90%

91%

93%

57%

76%(3)

76%

The Philippines

75%

80%

85%

84%

89%

99%

100%

Myanmar

89%

78%

59%

55%

67%

70%

64%(4)

Ghana

99%

100%

100%

100%

99%

99%

99%

Nigeria

95%

97%

96%

95%

94%

96%

96%

Sierra Leone

95%

89%

96%

93%

92%

94%

93%

Kenya

97%

98%

100%

100%

99%

99%

99%

Uganda

87%

93%

99%

100%

100%

95%

83%

Tanzania

99%

100%

100%

100%

100%

100%

100%

Rwanda

93%

91%

96%

95%

96%

96%

96%

Zambia

100%

100%

100%

100%

99%

100%

100%

 

(1) Collection efficiency refers to actual collections from clients divided by expected collections for the period; since any moratorium on the repayment of loans are only granted to clients after the end of the month, the collection efficiency is not affected by the grant of such moratorium.

(2) As of December 2020, the definition of collection efficiency has been amended in view of the increased amount of overdue collection and advance payments in various countries to: the sum of actual regular collections, actual overdue collections and actual advance payments divided by the sum of expected regular collections, actual overdue collections and actual advance payments. This also means that collection efficiency no longer can exceed 100%.

(3) Collection efficiency for 16-30 June 2021. The collection efficiency for 1-15 June 2021 is nil due to the lockdown in Sri Lanka, so only the collection efficiency for 16-30 June 2021 is provided.

(4) Collection efficiency for 1-16 July 2021. The collection efficiency for 17-31 July is nil due to the holiday from 17 July to 1 August 2021, announced by the Myanmar Government, so only the collection efficiency for 1-16 July 2021 is provided.

 

·    Collection efficiency across the Group increased or remained broadly stable compared to the previous month in all countries, with the exception of Myanmar and Uganda.

·    Collections in India improved to 58%, despite the increased disruptions to operations following lockdowns in most states, as a result of the severe second wave of COVID-19.

·    Collections in Sri Lanka increased to 76% after the new lockdowns.

·    Collections in Myanmar declined to 64%, due to a two weeks' holiday announced by the government, which is associated to a rapid and severe increase of COVID-19 infections.

·    In Uganda collections decreased to 83% due to the 42 days nationwide lockdowns from 10 June 2021 caused by the second wave of COVID-19.

Loan portfolio quality up to and including July 2021(5,6,7)

 

 Gross OLP (in USDm)

 

 Non-overdue loans

 

 PAR>30 less PAR>180

 

May/21

Jun/21

Jul/21

 

May/21

Jun/21

Jul/21

 

May/21

Jun/21

Jul/21

India (total)

      167

      155

      144

 

47.3%

57.5%

56.6%

 

15.3%

14.3%

14.6%

Pakistan

        76

        75

        74

 

97.0%

98.4%

98.4%

 

0.4%

0.3%

0.3%

Sri Lanka

          9

          8

          8

 

36.3%

62.7%

68.7%

 

4.6%

9.4%

8.3%

Philippines

        54

        55

        52

 

76.8%

76.6%

77.3%

 

18.3%

17.4%

4.2%

Myanmar

        24

        24

        24

 

58.2%

64.7%

50.4%

 

0.6%

0.5%

24.2%

Ghana

        46

        46

        43

 

99.3%

99.2%

98.9%

 

0.1%

0.2%

0.3%

Nigeria

        32

        33

        33

 

90.5%

90.8%

88.2%

 

2.5%

2.8%

3.0%

Sierra Leone

          6

          6

          6

 

92.2%

93.5%

81.9%

 

2.7%

2.5%

2.5%

Kenya

        17

        17

        18

 

86.9%

87.6%

88.5%

 

0.7%

0.6%

0.5%

Uganda

          9

          9

          8

 

87.4%

69.7%

62.6%

 

2.3%

0.6%

5.7%

Tanzania

        27

        28

        28

 

98.1%

98.1%

98.0%

 

0.3%

0.3%

0.4%

Rwanda

          3

          3

          3

 

89.0%

89.5%

87.0%

 

3.4%

2.9%

3.2%

Zambia

          1

          1

          1

 

98.4%

98.9%

98.0%

 

0.5%

0.3%

0.5%

Group

      470

      459

      442

 

73.1%

78.0%

77.0%

 

8.1%

7.5%

7.2%

 

 

 PAR>30

 

 PAR>90

 

 PAR>180

 

 

May/21

Jun/21

Jul/21

 

May/21

Jun/21

Jul/21

 

May/21

Jun/21

Jul/21

 

India (total)

27.8%

31.4%

34.2%

 

21.9%

21.8%

22.8%

 

12.5%

17.1%

19.6%

 

Pakistan

1.8%

1.5%

1.2%

 

1.7%

1.3%

1.1%

 

1.4%

1.1%

0.9%

 

Sri Lanka

7.7%

12.1%

10.8%

 

4.0%

4.0%

5.1%

 

3.1%

2.8%

2.5%

 

Philippines

20.8%

20.0%

19.5%

 

20.1%

19.4%

18.8%

 

2.5%

2.6%

15.4%

 

Myanmar

0.9%

0.7%

24.5%

 

0.6%

0.5%

0.6%

 

0.3%

0.2%

0.3%

 

Ghana

0.3%

0.3%

0.4%

 

0.3%

0.2%

0.2%

 

0.2%

0.2%

0.1%

 

Nigeria

5.3%

5.1%

5.1%

 

3.7%

3.4%

3.6%

 

2.8%

2.3%

2.1%

 

Sierra Leone

4.5%

4.3%

4.3%

 

3.2%

3.2%

3.2%

 

1.8%

1.7%

1.8%

 

Kenya

12.1%

11.4%

9.5%

 

11.8%

11.1%

9.3%

 

11.3%

10.8%

9.0%

 

Uganda

12.4%

12.7%

18.6%

 

12.4%

12.6%

13.0%

 

10.1%

12.1%

12.9%

 

Tanzania

1.7%

1.6%

1.6%

 

1.6%

1.5%

1.4%

 

1.4%

1.3%

1.3%

 

Rwanda

8.9%

8.4%

9.1%

 

7.1%

7.1%

7.7%

 

5.4%

5.6%

5.9%

 

Zambia

0.7%

1.1%

0.8%

 

0.4%

1.1%

0.6%

 

0.2%

0.8%

0.3%

 

Group

14.0%

14.8%

16.5%

 

11.6%

11.1%

11.0%

 

6.0%

7.3%

9.3%

 

 

(5)  Gross loan portfolio includes the off-book BC and DA model, excluding interest receivable and before deducting ECL provisions and modification loss.

(6)  PAR>x is the percentage of outstanding customer loans with at least one instalment payment overdue x days, excluding loans more than 365 days overdue, to gross outstanding loan portfolio including off-book loans.

(7)  The table "PAR>30 less PAR>180" shows the percentage of outstanding client loans with a PAR greater than 30 days, less those loans which have been fully provided for.

 

·    PAR>30 for the Group increased to 16.5%, primarily due to the decreased collections in Myanmar and Uganda.

Credit exposure of the India off-book BC portfolio of USD 36.8m is capped at 5%. The included off-book DA portfolio of USD 2.3m has no credit exposure.

Disbursements vs collections of loans until 31 July 2021(8)

Countries

Jan/21

Feb/21

Mar/21

Apr/21

May/21

Jun/21

Jul/21

 

India

90%

104%

131%

71%

3%

5%

25%

 

Pakistan

97%

99%

99%

102%

89%(9)

102%

98%

 

Sri Lanka

95%

116%

92%

43%

17%

0%

56%

 

The Philippines

113%

101%

96%

88%

91%

88%

87%

 

Myanmar

144%

55%

71%

30%

76%

87%

64%

 

Ghana

94%

112%

118%

99%

91%(9)

99%

85%

 

Nigeria

68%

105%

109%

109%

108%

109%

103%

 

Sierra Leone

89%

109%

110%

95%

101%

118%

119%

 

Kenya

97%

113%

107%

100%

100%

93%

107%

 

Uganda

46%

99%

99%

105%

99%

53%

60%

 

Tanzania

78%

97%

102%

107%

109%

96%

86%

 

Rwanda

60%

73%

86%

95%

106%

81%

61%

 

Zambia

137%

140%

115%

107%

142%

170%

103%

 

 

(8) Disbursements vs collections refers to actual loan disbursements made to clients divided by total loans collected from clients in the period.

(9) Slowdown in disbursements due to official EID holidays in second week of May.

 

·    With the business environment continuing to gradually improve in many countries, disbursements of new loans continued to stabilise or increase in amount and as a percentage of weekly collections, with the main exception of Myanmar, Ghana, Tanzania, Rwanda and Zambia, primarily due to seasonal effects (Ghana) and increased COVID-19 infections.

 

Development of Clients and Outstanding Loan Portfolio until 31 July 2021

 

 Clients (in thousands)

 Delta

 Gross OLP (in USDm)

 Delta

Countries

Jul/20

Jun/21

Jul/21

Jul/20- Jul/21

Jun/21- Jul/21

Jul/20

Jun/21

Jul/21

Jul/20- Jul/21 USD

Jul/20- Jul/21 CC (10)

Jun/21- Jul/21 USD

India

713

721

706

-1%

-2%

168

155

144

-14%

-15%

-7%

Pakistan

405

468

477

18%

2%

54

75

74

38%

34%

-1%

Sri Lanka

54

54

53

-3%

-3%

8

8

8

-4%

4%

-3%

The Philippines

297

335

338

14%

1%

47

55

52

13%

15%

-4%

Myanmar

136

119

119

-13%

-1%

30

24

24

-21%

-4%

-1%

Ghana

140

157

154

9%

-2%

36

46

43

20%

24%

-6%

Nigeria

213

251

258

21%

3%

24

33

33

39%

48%

1%

Sierra Leone

30

40

40

34%

2%

3

6

6

88%

98%

4%

Kenya

78

113

116

48%

3%

12

17

18

48%

49%

5%

Uganda

93

85

83

-11%

-3%

8

9

8

-6%

-9%

-8%

Tanzania

100

147

150

50%

2%

16

28

28

73%

73%

1%

Rwanda

19

17

17

-13%

-3%

3

3

3

1%

7%

-6%

Zambia

4

10

10

194%

6%

0

1

1

206%

224%

12%

Total

2,284

2,517

2,521

10%

0%

409

459

442

8%

10%

-3.6%

 

(10) Constant currency ('CC') implies conversion of local currency results to USD with the exchange rate from the beginning of the period.

·    With disbursements decreasing mainly in India, Gross OLP decreased 3.6% to USD 442m in July 2021 compared to the previous month.

 

Selected moratoriums(11) on loan repayments until 31 July 2021

 

 Clients under moratorium (in thousands)

As % of

Countries

May/21

Jun/21

Jul/21

As % of Total Clients

India

0

226

230

33%

Pakistan

0

0

0

0%

Sri Lanka

0

11

6

11%

The Philippines

0

0

0

0%

Myanmar

56

0

0

0%

Ghana

0

0

0

0%

Nigeria

0

0

0

0%

Sierra Leone

0

0

0

0%

Kenya

0

0

0

0%

Uganda

0

0

0

0%

Tanzania

0

0

0

0%

Rwanda

0

0

0

0%

Zambia

0

0

0

0%

Total

56

237

236

9%

 

 

 Moratorium amounts (USD thousands)

 

 

Countries

May/21

Jun/21

Jul/21

 July moratoriums as % of OLP

 As % of Total Moratoriums

India

0

48,198

46,498

32%

99.8%

Pakistan

0

0

0

0%

0.0%

Sri Lanka

0

134

96

1%

0.2%

The Philippines

0

0

0

0%

0.0%

Myanmar

1,290

0

0

0%

0.0%

Ghana

0

0

0

0%

0.0%

Nigeria

0

0

0

0%

0.0%

Sierra Leone

0

0

0

0%

0.0%

Kenya

0

0

0

0%

0.0%

Uganda

0

0

0

0%

0.0%

Tanzania

0

0

0

0%

0.0%

Rwanda

0

0

0

0%

0.0%

Zambia

0

0

0

0%

0.0%

Total

1,290

48,331

46,594

11%

100.0%

(11) Moratoriums relate to clients who have received an extension for the payment of one or more loan instalments during the month.

·    Moratoriums on loan repayments relate primarily to approximately 30% of the clients in India, who accepted to benefit from the one-time debt restructuring scheme established by the RBI. See RBI COVID-19 Restructuring Guidelines. 

·    Moratoriums granted in Sri Lanka were due to disruption in operations following national lockdowns.

The moratorium amount across the Group was USD 46.6m, which represents 11% of the Group's Gross OLP.

Key events in August 2021

·    In the Philippines, the capital region of Manila was placed under a very strict lockdown on 6 August until 20 August 2021.  

 

Please note that, while the Company's operational performance appears to gradually normalize in most countries except for India, Myanmar, Sri Lanka and Uganda, the risk of additional challenges to our operations should not be underestimated, as we have recently seen in for instance India and Myanmar, due to (i) the still relatively high infection rates, (ii) the current lack of available vaccines in most of our operating countries, (iii) the risk of the introduction of more infectious COVID-19 variants in our operating countries as have been observed in the United Kingdom, South Africa, Brazil, the Philippines and India, and (iv) the associated disruption this may cause to the businesses of our clients.

 

---

 

 

 

 

Enquiries:

ASA International Group plc

Investor Relations                                                                                                                        +31 6 2030 0139

Véronique Schyns                                                                                           vschyns@asa-international.com

 

About ASA International Group plc

ASA International is one of the world's largest international microfinance institutions, with a strong commitment to financial inclusion and socioeconomic progress. The company provides small, socially responsible loans to low-income, financially underserved entrepreneurs, predominantly women, across South Asia, South East Asia, West and East Africa.

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