TIDMASAI

RNS Number : 1486C

ASA International Group PLC

17 June 2021

ASA International Group plc May 2021 business update

Amsterdam, The Netherlands, 17 June 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 May 2021.

-- Liquidity remains high with approximately USD 105m of unrestricted cash and cash equivalents across the Group.

   --    The pipeline of funding deals under negotiation totalled approximately USD 162m. 

-- With the exception of India, Sri Lanka, the Philippines, and Myanmar, all other operating companies achieved collection efficiency of more than 90% and 7 out of 13 countries achieved collection efficiency of more than 95%.

-- India collections decreased to 67% mainly due to lockdowns in most states following the second wave of COVID-19 affecting the whole country.

   --    Sri Lanka collections reduced to 57% due to the implementation of new lockdowns. 

-- The Philippines collections increased to 89% despite the implementation of various regional lockdowns.

-- Collections in Myanmar increased to 67% despite the ongoing disruptions following the military's takeover of the Government.

-- Portfolio quality remained challenging, particularly in India and the Philippines with benchmark PAR>30 for the Group, including off-book loans and excluding loans overdue more than 365 days, slightly increasing to 14.0% from 13.3% in April 2021, and PAR>90 slightly increasing to 11.6% from 10.6% in April 2021. The Group's operating subsidiaries, excluding India, the Philippines and Myanmar, collectively have been able to maintain PAR>30 at 3.6%.

-- Disbursements as percentage of collections exceeded 100% in 5 countries with much lower percentages seen in India, Sri Lanka, and Myanmar.

-- The number of clients remained around 2.5m, while Gross OLP decreased to USD 470m (8% higher than in May 2020 and 2.4% lower compared to April 2021), across the Group.

-- The moratoriums granted in May amounted to USD 1.3 m, primarily related to ongoing disruption of the operations in Myanmar .

Health impact of COVID-19 on staff and clients

-- The immediate health impact of COVID-19 on the Company's operations remained low with only 203 of over 12,500 staff members confirmed as infected since March 2020 , but with no deaths . Since March 2020, confirmed infections amongst 2.5m clients increased from 2,107 at the end of April 2021 to 4,977 as at 31 May 2021, resulting in 56 deaths since the start of the pandemic. Of the 56 client deaths across the Group, 23 are from India, with 18 of those deaths occurring in May 2021.

Funding

   --    Unrestricted cash and cash equivalents remained high at approximately USD 105m. 

-- The Company secured approximately USD 6m of new loans from local and international lenders in May 2021.

-- The majority of the Company's USD 162m pipeline of future wholesale loans are supported by (agreed) term sheets and/or draft loan documentations. The terms and conditions of the remaining loans are being negotiated with lenders.

Collection efficiency until 31 May 2021 (1, 2)

 
 Countries          Jan/21   Feb/21   Mar/21   Apr/21   May/21 
                   -------  -------  -------  ------- 
 India               82%      84%      87%      87%      67% 
 Pakistan            98%      99%      99%      99%      99% 
 Sri Lanka           97%      90%      91%      93%      57% 
 The Philippines     75%      80%      85%      84%      89% 
 Myanmar             89%      78%      59%      55%      67% 
 Ghana               99%      100%     100%     100%     99% 
 Nigeria             95%      97%      96%      95%      94% 
 Sierra Leone        95%      89%      96%      93%      92% 
 Kenya               97%      98%      100%     100%     99% 
 Uganda              87%      93%      99%      100%     100% 
 Tanzania            99%      100%     100%     100%     100% 
 Rwanda              93%      91%      96%      95%      96% 
 Zambia              100%     100%     100%     100%     99% 
-----------------  -------  -------  -------  -------  ------- 
 
 
      (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 collections efficiency no longer can exceed 
       100%. 
 

-- Collection efficiency across the Group increased or remained broadly stable compared to the previous month in all countries, with the exception of India and Sri Lanka .

-- Collections in India decreased to 67 % compared to the previous month, due to the challenging environment following 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 reduced to 57% due to the implementation of new lockdowns. 

-- Collections improved to 89% in the Philippines despite the imposition of various local and regional lockdowns following a recent spike in COVID-19 cases.

-- Collections in Myanmar increased to 67% compared to the previous month, despite disruptions to the ordinary life of citizens caused by the military's takeover of the Government and ongoing nation-wide protests.

Loan portfolio quality up to and including May 2021 (3, 4)

 
                         Gross OLP (in USDm)               Non-overdue loans               PAR>30 
               -------------------------------------  -------------------------  ------------------------- 
                    Mar/21       Apr/21       May/21   Mar/21   Apr/21   May/21   Mar/21   Apr/21   May/21 
 India 
  (total)            182          177          167      69.4%    70.0%    47.3%    25.8%    24.3%    27.8% 
 Pakistan              74           76           76     96.7%    96.9%    97.0%     2.8%     2.3%     1.8% 
 Sri Lanka               9            9            9    89.4%    89.0%    36.3%     4.9%     6.0%     7.7% 
 Philippines           53           54           54     76.2%    75.7%    76.8%    22.5%    21.7%    20.8% 
 Myanmar               31           26           24     48.9%    48.8%    58.2%     4.4%     3.1%     0.9% 
 Ghana                 47           47           46     99.5%    99.4%    99.3%     0.3%     0.3%     0.3% 
 Nigeria               33           34           32     91.5%    91.3%    90.5%     5.3%     5.3%     5.3% 
 Sierra 
  Leone                  5            5            6    92.1%    91.9%    92.2%     4.6%     4.6%     4.5% 
 Kenya                 15           16           17     84.9%    86.0%    86.9%    14.0%    13.0%    12.1% 
 Uganda                  8            9            9    81.1%    84.9%    87.4%    18.7%    14.9%    12.4% 
 Tanzania              24           25           27     97.7%    97.9%    98.1%     2.1%     1.9%     1.7% 
 Rwanda                  3            3            3    85.8%    87.4%    89.0%    10.3%     9.7%     8.9% 
 Zambia                  1            1            1    98.4%    98.6%    98.4%     1.6%     1.4%     0.7% 
 Group               484          482          470      80.3%    81.1%    73.1%    14.3%    13.3%    14.0% 
 
 
                             PAR>90                    PAR>180 
                    -------------------------  ------------------------- 
                     Mar/21   Apr/21   May/21   Mar/21   Apr/21   May/21 
    India (total)     18.5%    18.4%    21.9%     5.9%     8.4%    12.5% 
    Pakistan           2.6%     2.1%     1.7%     2.1%     1.8%     1.4% 
    Sri Lanka          3.9%     3.6%     4.0%     2.9%     3.0%     3.1% 
    Philippines        3.9%    19.1%    20.1%     1.8%     2.2%     2.5% 
    Myanmar            3.4%     2.3%     0.6%     1.9%     1.7%     0.3% 
    Ghana              0.3%     0.3%     0.3%     0.3%     0.3%     0.2% 
    Nigeria            4.2%     3.9%     3.7%     3.2%     3.1%     2.8% 
    Sierra 
     Leone             3.2%     3.2%     3.2%     2.0%     1.9%     1.8% 
    Kenya             13.8%    12.7%    11.8%    13.5%    11.5%    11.3% 
    Uganda            18.4%    14.9%    12.4%     2.8%     7.3%    10.1% 
    Tanzania           1.9%     1.7%     1.6%     1.5%     1.5%     1.4% 
    Rwanda             8.4%     7.8%     7.1%     3.2%     5.0%     5.4% 
    Zambia             1.5%     1.3%     0.4%     0.7%     1.0%     0.2% 
    Group              9.3%    10.6%    11.6%     3.7%     4.6%     6.0% 
 
 
   (3) 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. 
   (4) Gross loan portfolio includes the off-book BC and DA model, excluding 
   interest receivable and before deducting ECL provisions and modification 
   loss. 
 
   --    PAR>30 increased to 14.0% primarily due to the decreased collections for India and Sri Lanka. 

-- PAR>90 increased to 11.6% for the Group primarily due to the large amount of long-term overdue in India and the Philippines in the absence of the granting of any further moratoriums .

-- Credit exposure of the India off-book BC portfolio of USD 42.6m is capped at 5%. The included off-book DA portfolio of USD 2.2m has no credit exposure.

Disbursements vs collections of loans until 31 May 2021 (5)

 
 Countries                 Jan/21      Feb/21      Mar/21      Apr/21     May/21 
                         ----------  ----------  ----------  --------- 
 India                       90%        104%        131%        71%         3% 
 Pakistan                    97%         99%         99%        102%      89% (6) 
 Sri Lanka                   95%        116%         92%        43%         17% 
 The Philippines            113%        101%         96%        88%         91% 
 Myanmar                    144%         55%         71%        30%         76% 
 Ghana                       94%        112%        118%        99%       91% (6) 
 Nigeria                     68%        105%        109%        109%       108% 
 Sierra Leone                89%        109%        110%        95%        101% 
 Kenya                       97%        113%        107%        100%       100% 
 Uganda                      46%         99%         99%        105%        99% 
 Tanzania                    78%         97%        102%        107%       109% 
 Rwanda                      60%         73%         86%        95%        106% 
 Zambia                     137%        140%        115%        107%       142% 
-----------------------  ----------  ----------  ----------  ---------  ---------- 
 
   (5) Disbursements vs collections refers to actual loan disbursements 
   made to clients divided by total loans collected from clients in 
   the period. 
   (6) 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 exception of India and Sri Lanka.

Development of Clients and Outstanding Loan Portfolio until 31 May 2021

 
                        Clients (in                                   Gross OLP (in 
                         thousands)               Delta                   USDm)                       Delta 
                                                                                           May/20-   May/20-   Apr/21- 
                                            May/20-   Apr/21-                               May/21    May/21    May/21 
 Countries       May/20   Apr/21   May/21    May/21    May/21   May/20   Apr/21   May/21       USD    CC (7)       USD 
 India              741      747      735       -1%       -2%      179      177      167       -7%      -10%       -6% 
 Pakistan           423      454      462        9%        2%       59       76       76       30%       22%        1% 
 Sri Lanka           62       56       56      -10%       -1%       10        9        9      -11%       -5%       -4% 
 The 
  Philippines       341      325      331       -3%        2%       53       54       54        2%       -3%        0% 
 Myanmar            144      125      120      -17%       -4%       31       26       24      -23%      -10%       -9% 
 Ghana              136      158      158       16%        0%       33       47       46       42%       42%       -2% 
 Nigeria            242      257      253        4%       -2%       25       34       32       24%       33%       -6% 
 Sierra 
  Leone              32       39       40       26%        1%        3        5        6       85%       95%        3% 
 Kenya               86      105      109       27%        3%       13       16       17       25%       26%        4% 
 Uganda              98       85       86      -12%        2%        9        9        9        0%       -6%        6% 
 Tanzania           113      137      141       25%        3%       17       25       27       59%       59%        7% 
 Rwanda              20       18       18      -13%       -1%        3        3        3       10%       17%        5% 
 Zambia               3        8        9      167%       13%        0        1        1      201%      269%        4% 
 Total            2,442    2,514    2,518        3%        0%      436      482      470        8%        7%     -2.4% 
 

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

-- With disbursements decreasing in India , Gross OLP decreased 2.4% to USD 470m in May 2021 compared to the previous month, but ended up 8% higher than May 2020 in USD with strong growth in Pakistan, Ghana, Nigeria, and Tanzania of our more established operating countries.

Selected moratoriums (8) on loan repayments until 31 May 2021

 
                       Clients under moratorium           As % of 
 Countries            Mar/21     Apr/21    May/21   Total Clients 
 India                     0          0         0              0% 
 Pakistan                  0          0         0              0% 
 Sri Lanka                 0      1,321         0              0% 
 The Philippines         793          0         0              0% 
 Myanmar              63,074     60,156    55,910             47% 
 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                63,867     61,477    55,910            2.2% 
 
 
                     Moratorium amounts (USD 
                      thousands) 
                                                  Total    May moratoriums 
                                                  since            as % of               As % of 
        Countries   Mar/21   Apr/21   May/21     Mar/20                OLP     Total Moratoriums 
 India                   0        0        0     15,038                 0%                   22% 
 Pakistan                0        0        0          0                 0%                    0% 
 Sri Lanka               0       16        0      2,051               0.0%                    3% 
 The Philippines        16        0        0     27,027                 0%                   40% 
 Myanmar             1,356    1,315    1,290     12,363                 5%                   18% 
 Ghana                   0        0        0          0                 0%                    0% 
 Nigeria                 0        0        0        954                 0%                    1% 
 Sierra Leone            0        0        0         50                 0%                    0% 
 Kenya                   0        0        0      4,841                 0%                    7% 
 Uganda                  0        0        0      4,873                 0%                    7% 
 Tanzania                0        0        0        266                 0%                    0% 
 Rwanda                  0        0        0        570                 0%                    1% 
 Zambia                  0        0        0          0                 0%                    0% 
 Total               1,372    1,331    1,290     68,033               0.3%                100.0% 
 

(8) 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 were granted primarily to clients in Myanmar and amounted to USD 1.3m in total, which represents 0.3 % of the Group's Gross OLP.

-- Moratoriums granted in Myanmar were due to disruption in operations following the military's takeover of the Government and ongoing nation-wide protests.

Key events after 31 May 2021

-- On 7 June 2021, ASA Tanzania received the non-deposit taking license by the Central Bank of Tanzania, which will allow it to proceed with applying for a full deposit taking license.

-- on 11 June 2021, the Assam Government in India announced their intention to waive loans of microfinance clients on a limited basis, for loans taken before 31 December 2020. Discussions remain ongoing within the government and with the microfinance industry association (MFIN) to determine the full extent of the waiver program.

-- In June, (partial) lockdowns and restricted movements are still ongoing in most of the states where ASA India is present, which continues to impact collection efficiency.

Please note that, while the Company's operational performance appears to gradually normalize in most countries, the risk of additional challenges to our operations should not be underestimated 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

VĂ©ronique 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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