REG - ASA Intnl. Grp PLC - July 2021 business update

ASA InternationalAnnouncement

18/08/2021 07:05

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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