TIDMASAI

RNS Number : 7307F

ASA International Group PLC

20 July 2021

ASA International Group plc June 2021 business update

Amsterdam, The Netherlands, 20 July 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 30 June 2021.

-- Liquidity remains high with approximately USD 108m of unrestricted cash and cash equivalents across the Group.

   --    The pipeline of funding deals under negotiation totalled approximately USD 163m. 

-- With the exception of India, Sri Lanka and Myanmar, all other operating companies achieved collection efficiency of more than 94%.

-- India collections decreased further to 55% due to lockdowns in most states following the second wave of COVID-19 affecting the whole country.

   --    Sri Lanka collections for the month dropped to 38% following nationwide lockdowns. 

-- The Philippines collections increased to 99% following improvements in the operating environment due to fewer restrictions on movement of people.

-- Collections in Myanmar increased to 70% despite the ongoing disruptions following the military's takeover of the Government.

-- 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 14.8% from 14.0% in May 2021, and PAR>90 slightly improving to 11.1% from 11.6% in May 2021. 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 5 countries with much lower percentages seen in India, Sri Lanka, and Uganda, due to amongst others lockdowns.

-- The number of clients remained around 2.5m, while Gross OLP decreased to USD 459m (11% higher than in June 2020 and 2.5% lower compared to May 2021), due to amongst others the lockdowns in India.

-- The moratoriums granted in June amounted to USD 48.3 m, primarily due to loan restructuring of 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 remained low with only 247 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 4,977 at the end of May 2021 to 7,262 as at 30 June 2021, resulting in 73 deaths since the start of the pandemic. Of the 73 client deaths across the Group, 32 are from India, with 9 of those deaths occurring in June 2021.

Funding

   --    Unrestricted cash and cash equivalents remained high at approximately USD 108m. 

-- The Company secured approximately USD 34m of new loans from local and international lenders in June 2021.

-- The majority of the Company's USD 163m 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.

-- 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 30 June 2021 (1,2)

 
 Countries          Jan/21   Feb/21   Mar/21   Apr/21   May/21   Jun/21 
                   -------  -------  -------  -------  ------- 
 India              82%      84%      87%      87%      67%      55% 
 Pakistan           98%      99%      99%      99%      99%      99% 
 Sri Lanka          97%      90%      91%      93%      57%      38% 
 The Philippines    75%      80%      85%      84%      89%      99% 
 Myanmar            89%      78%      59%      55%      67%      70% 
 Ghana              99%      100%     100%     100%     99%      99% 
 Nigeria            95%      97%      96%      95%      94%      96% 
 Sierra Leone       95%      89%      96%      93%      92%      94% 
 Kenya              97%      98%      100%     100%     99%      99% 
 Tanzania           99%      100%     100%     100%     100%     100% 
 Uganda             87%      93%      99%      100%     100%     95% 
 Rwanda             93%      91%      96%      95%      96%      96% 
 Zambia             100%     100%     100%     100%     99%      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%. 
 

-- 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 55 % compared to the previous month, due to the increased disruptions to operations following lockdowns in most States, as a result of the severe second wave of COVID-19, which affected disbursements and also caused the Group to explore the possibilities to raise some equity capital for ASA India (see the Funding paragraph).

   --    Collections in Sri Lanka reduced to 38% due to the implementation of new lockdowns. 

-- In the Philippines collections improved significantly to 99%, as some local and regional restrictions on movement of people were partially lifted.

   -- Collections in Myanmar increased to 70% 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 June 2021(3,4)

 
                         Gross OLP (in USDm)               Non-overdue loans               PAR>30 
               -------------------------------------  -------------------------  ------------------------- 
                    Apr/21       May/21       Jun/21   Apr/21   May/21   Jun/21   Apr/21   May/21   Jun/21 
 India 
  (total)            177          167          155      70.0%    47.3%    57.5%    24.3%    27.8%    31.4% 
 Pakistan              76           76           75     96.9%    97.0%    98.4%     2.3%     1.8%     1.5% 
 Sri Lanka               9            9            8    89.0%    36.3%    62.7%     6.0%     7.7%    12.1% 
 Philippines           54           54           55     75.7%    76.8%    76.6%    21.7%    20.8%    20.0% 
 Myanmar               26           24           24     48.8%    58.2%    64.7%     3.1%     0.9%     0.7% 
 Ghana                 47           46           46     99.4%    99.3%    99.2%     0.3%     0.3%     0.3% 
 Nigeria               34           32           33     91.3%    90.5%    90.8%     5.3%     5.3%     5.1% 
 Sierra 
  Leone                  5            6            6    91.9%    92.2%    93.5%     4.6%     4.5%     4.3% 
 Kenya                 16           17           17     86.0%    86.9%    87.6%    13.0%    12.1%    11.4% 
 Uganda                  9            9            9    84.9%    87.4%    69.7%    14.9%    12.4%    12.7% 
 Tanzania              25           27           28     97.9%    98.1%    98.1%     1.9%     1.7%     1.6% 
 Rwanda                  3            3            3    87.4%    89.0%    89.5%     9.7%     8.9%     8.4% 
 Zambia                  1            1            1    98.6%    98.4%    98.9%     1.4%     0.7%     1.1% 
 Group               482          470          459      81.1%    73.1%    78.0%    13.3%    14.0%    14.8% 
 
 
                           PAR>90                     PAR>180 
                 -------------------------  ------------------------- 
                  Apr/21   May/21   Jun/21   Apr/21   May/21   Jun/21 
 India (total)     18.4%    21.9%    21.8%     8.4%    12.5%    17.1% 
 Pakistan           2.1%     1.7%     1.3%     1.8%     1.4%     1.1% 
 Sri Lanka          3.6%     4.0%     4.0%     3.0%     3.1%     2.8% 
 Philippines       19.1%    20.1%    19.4%     2.2%     2.5%     2.6% 
 Myanmar            2.3%     0.6%     0.5%     1.7%     0.3%     0.2% 
 Ghana              0.3%     0.3%     0.2%     0.3%     0.2%     0.2% 
 Nigeria            3.9%     3.7%     3.4%     3.1%     2.8%     2.3% 
 Sierra 
  Leone             3.2%     3.2%     3.2%     1.9%     1.8%     1.7% 
 Kenya             12.7%    11.8%    11.1%    11.5%    11.3%    10.8% 
 Uganda            14.9%    12.4%    12.6%     7.3%    10.1%    12.1% 
 Tanzania           1.7%     1.6%     1.5%     1.5%     1.4%     1.3% 
 Rwanda             7.8%     7.1%     7.1%     5.0%     5.4%     5.6% 
 Zambia             1.3%     0.4%     1.1%     1.0%     0.2%     0.8% 
 Group             10.6%    11.6%    11.1%     4.6%     6.0%     7.3% 
 
 
 (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 for the Group increased to 14.8%, primarily due to the decreased collections in India and following restructuring of loans for clients by offering moratoriums to clients impacted by the recent lockdowns.

-- Credit exposure of the India off-book BC portfolio of USD 38.7m is capped at 5%. The included off-book DA portfolio of USD 2.3m has no credit exposure.

Disbursements vs collections of loans until 30 June 2021(5)

 
 Countries               Jan/21     Feb/21    Mar/21    Apr/21     May/21    Jun/21 
                       ---------  ---------  --------  --------  --------- 
 India                    90%        104%      131%       71%        3%        5% 
 Pakistan                 97%        99%        99%      102%     89% (6)     102% 
 Sri Lanka                95%        116%       92%       43%       17%        0% 
 The Philippines          113%       101%       96%       88%       91%        88% 
 Myanmar                  144%       55%        71%       30%       76%        87% 
 Ghana                    94%        112%      118%       99%     91% (6)      99% 
 Nigeria                  68%        105%      109%      109%       108%      109% 
 Sierra Leone             89%        109%      110%       95%       101%      118% 
 Kenya                    97%        113%      107%      100%       100%       93% 
 Uganda                   46%        99%        99%      105%       99%        53% 
 Tanzania                 78%        97%       102%      107%       109%       96% 
 Rwanda                   60%        73%        86%       95%       106%       81% 
 Zambia                   137%       140%      115%      107%       142%      170% 
---------------------  ---------  ---------  --------  --------  ---------  -------- 
 
   (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, Sri Lanka and Uganda, due to amongst others the lockdowns.

Development of Clients and Outstanding Loan Portfolio until 30 June 2021

 
                                                                       Gross OLP (in 
                   Clients (in thousands)           Delta                  USDm)                       Delta 
                                                                                                      Jun/20-   May/21 
                                                        May/21                              Jun/20-    Jun/21        - 
                                              Jun/20-        -                               Jun/21        CC   Jun/21 
 Countries       Jun/20    May/21    Jun/21    Jun/21   Jun/21   Jun/20   May/21   Jun/21       USD       (7)      USD 
 India              727       735       721       -1%      -2%      171      167      155       -9%      -11%      -7% 
 Pakistan           409       462       468       14%       1%       54       76       75       39%       31%      -1% 
 Sri Lanka           56        56        54       -2%      -3%        9        9        8       -4%        3%      -3% 
 The 
  Philippines       308       331       335        9%       1%       48       54       55       15%       13%       1% 
 Myanmar            140       120       119      -15%      -1%       30       24       24      -20%       -5%       0% 
 Ghana              134       158       157       17%      -1%       34       46       46       36%       38%      -2% 
 Nigeria            225       253       251       12%      -1%       24       32       33       38%       46%       3% 
 Sierra 
  Leone              30        40        40       31%       0%        3        6        6       93%      103%       5% 
 Kenya               78       109       113       44%       3%       12       17       17       35%       37%       1% 
 Uganda              96        86        85      -11%      -1%        9        9        9       -5%      -10%      -9% 
 Tanzania           104       141       147       42%       4%       15       27       28       82%       82%       3% 
 Rwanda              20        18        17      -13%      -2%        3        3        3        9%       13%       0% 
 Zambia               3         9        10      182%      10%        0        1        1      246%      332%      21% 
 Total            2,332     2,518     2,517        8%       0%      412      470      459       11%       12%    -2.5% 
 

(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 mainly in India , Gross OLP decreased 2.5% to USD 459m in June 2021 compared to the previous month.

Selected moratoriums(8) on loan repayments until 30 June 2021

 
                       Clients under moratorium 
                            (in thousands)                As % of 
 Countries            Apr/21     May/21    Jun/21   Total clients 
 India                     0          0       226             31% 
 Pakistan                  0          0         0              0% 
 Sri Lanka                 1          0        11             20% 
 The Philippines           0          0         0              0% 
 Myanmar                  60         56         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                    61         56       237            9.4% 
 
 
                       Moratorium amounts 
                         (USD thousands) 
                                                Total      June moratoriums 
                                                 since      as % of            As % of 
 Countries          Apr/21   May/21   Jun/21     Mar/20     OLP                 total moratoriums 
 India                   0        0   48,201     63,018                 31%                   55% 
 Pakistan                0        0        0          0                  0%                    0% 
 Sri Lanka              16        0      134      2,168                  2%                    2% 
 The Philippines         0        0        0     26,404                  0%                   23% 
 Myanmar             1,315    1,290        0     12,354                  0%                   11% 
 Ghana                   0        0        0          0                  0%                    0% 
 Nigeria                 0        0        0        957                  0%                    1% 
 Sierra Leone            0        0        0         50                  0%                    0% 
 Kenya                   0        0        0      4,830                  0%                    4% 
 Uganda                  0        0        0      4,857                  0%                    4% 
 Tanzania                0        0        0        266                  0%                    0% 
 Rwanda                  0        0        0        578                  0%                    1% 
 Zambia                  0        0        0          0                  0%                    0% 
 Total               1,331    1,290   48,334    115,482               10.5%                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 relate primarily to approximately 30% of the clients in India, who were offered 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 48.3m, which represents 10.5 % of the Group's Gross OLP.

Key events in June 2021

-- In India, RBI released a Consultative Document on Regulation of Microfinance on 14 June 2021. RBI proposes a harmonisation of regulations for all entities operating in the microfinance sector. If adopted, the new regulations would create the same operating environment for NBFC-MFIs, Small Finance Banks, NBFC and Universal Banks operating in the microfinance sector. The Consultative Document proposes amongst others the removal of existing caps for NBFC-MFIs on the number of total lenders (two NBFC-MFIs, three in total), ticket sizes, tenures, and loan pricing (10% margin cap), which were up until now only applicable to NBFC-MFIs.

Please note that, while the Company's operational performance appears to gradually normalize in most countries except for India and Sri Lanka, 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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