TIDMASAI

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 46.6 m, 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

 
                                                                      Gross OLP (in 
                  Clients (in thousands)          Delta                   USDm)                       Delta 
                                                                                                     Jul/20- 
                                                                                           Jul/20-    Jul/21   Jun/21- 
                                            Jul/20-   Jun/21-                               Jul/21        CC    Jul/21 
 Countries      Jul/20   Jun/21    Jul/21    Jul/21    Jul/21   Jul/20   Jun/21   Jul/21       USD      (10)       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 
                                                    As % of Total 
 Countries            May/21     Jun/21    Jul/21         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) 
                                                    July moratoriums               As % of 
 Countries            May/21    Jun/21    Jul/21         as % of OLP     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

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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