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

ASA InternationalAnnouncement

17/06/2021 07:05

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 1.3m, 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 thousands) 


 Delta 


 Gross OLP (in USDm)


 Delta 




Countries


May/20


Apr/21


May/21


May/20- May/21


Apr/21- May/21


May/20


Apr/21


May/21


May/20- May/21 USD


May/20- May/21 CC (7)


Apr/21- May/21 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) 


 


 




Countries


Mar/21


Apr/21


May/21


 Total since Mar/20 


 May moratoriums as % of OLP 


 As % of 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
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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
  END
 
 
UPDSFWFIMEFSESM