REG - ASA Intnl. Grp PLC - May 2022 Business Update

ASA InternationalAnnouncement

16/06/2022 07:00

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RNS Number : 0470P  ASA International Group PLC  16 June 2022

ASA International Group plc May 2022 business update

Amsterdam, The Netherlands, 16 June 2022 - ASA International, ('ASA
International', the 'Company' or the 'Group'), one of the world's largest
international microfinance institutions, today provides the following update
on its business operations as at 31 May 2022.

·    Liquidity remains high with approximately USD 103m of unrestricted
cash and cash equivalents across the Group.

·    The pipeline of funding deals under negotiation totalled approximately
USD 203m.

·    With the exception of India and Myanmar, all other operating
subsidiaries continued to achieve collection efficiency of more than 90% with
10 countries achieving more than 95%.

·    India collections remained at 83%. Collection efficiency, excluding
instalments due from clients receiving the one-time loan restructuring offered
by the Reserve Bank of India ('RBI'), however decreased from 111% to 109%.

·    The benchmark PAR>30 for the Group, including off-book loans and
excluding loans overdue more than 365 days, slightly improved from 6.3% to
6.0%.

·    The PAR>30 for the Group's operating subsidiaries, excluding India
and Myanmar, remained at 1.9%.

·    Excluding all loans which have been overdue for more than 180 days
and, as a result, have been fully provided for, PAR>30 slightly decreased
from 4.4% to 4.2%.

·    Disbursements as percentage of collections exceeded 100% in 10
countries. The decreasing percentage in Sri Lanka was primarily due to the
political unrest.

·    With the number of clients broadly stable at 2.4m, the strategic
reduction of disbursements in India and Sri Lanka and currency depreciation
versus USD across almost all markets, particularly in Pakistan (7%
depreciation in May), the Gross OLP decreased to USD 414m (1.1% lower than in
April 2022 and 12% lower than in May 2021).

·    Gross OLP for the Group in constant currency was at the same level as
May 2021 at USD 473m. Gross OLP in constant currency, excluding India, was USD
320m (23% higher than in May 2021).

·    The moratorium amount decreased from USD 19.8m to USD 18.4m, and is
composed of the restructured loans of certain distressed clients in India as
per the RBI guidelines. No other operating subsidiary granted moratoriums.

Going forward the Company will move from publishing monthly business updates
to quarterly updates. The next one will be the August business update,
published together with the 2022 Interim results on 20 September 2022.

 

Funding

·    Unrestricted cash and cash equivalents remained high at approximately
USD 103m.

·    The Company secured approximately USD 3m of new loans from local and
international lenders in May 2022.

·    The majority of the Company's USD 203m 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.

 

Collection efficiency until 31 May 2022((1))

 Countries        Dec/21    Jan/22    Feb/22    Mar/22    Apr/22    May/22
 India            74%       76%       76%       81%       83%       83%
 Pakistan         99%       99%       100%      100%      100%      100%
 Sri Lanka        94%       93%       93%       94%       93%       92%
 The Philippines  97%       98%       98%       99%       99%       99%
 Myanmar          78%((2))  78%((2))  72%((2))  72%((2))  72%((2))  73%((2))
 Ghana            99%       99%       99%       100%      100%      100%
 Nigeria          96%       95%       96%       96%       95%       95%
 Sierra Leone     92%       92%       92%       94%       94%       96%
 Kenya            100%      99%       100%      100%      100%      100%
 Uganda           100%      100%      100%      100%      100%      100%
 Tanzania         100%      100%      100%      100%      100%      100%
 Rwanda           97%       97%       97%       97%       97%       97%
 Zambia           99%       100%      100%      98%       98%       98%
 ((1)) Collection efficiency refers to actual collections from clients divided
 by realizable collections for the period. It is calculated as follows: the sum
 of actual regular collections, actual overdue collections and actual advance
 payments divided by the sum of realizable regular collections, actual overdue
 collections and actual advance payments. Under this definition collection
 efficiency cannot exceed 100%.

 ((2)) Collections are impacted by the ongoing lockdowns and civil unrest in
 some areas of our operations.

·    Collection efficiency across the Group increased or remained broadly
stable compared to the previous month in all countries.

·    Collections in India remained at 83%. Collection efficiency, excluding
instalments due from clients receiving the one-time loan restructuring,
however decreased from 111% to 109%.

·    Collection efficiency in India, including regular and overdue
collections as well as advance payments, decreased from 109% to 108% as a
percentage of the regular, realisable collections, including advance payments.
The substantial difference between this measure of collection efficiency and
the version in the table above is due to the Group's policy that any loan
instalment paid is first credited against the oldest outstanding amount
overdue. This has an adverse impact on India's monthly collection efficiency,
which is further aggravated by the relatively long duration of the loans
disbursed in India. This adjusted collection efficiency metric illustrates
that most clients in India continue to make payments on their loans due.

 

Loan portfolio quality up to and including May 2022((3, 4, 5))

                Gross OLP (in USDm)            Non-overdue loans           PAR>30 less PAR>180
                Mar-22   Apr-22   May-22       Mar-22  Apr-22  May-22      Mar-22     Apr-22     May-22
 India (total)  103      98       94           70.1%   70.7%   71.2%       9.3%       8.6%       8.0%
 Pakistan       83       84       80           99.7%   99.7%   99.7%       0.2%       0.2%       0.2%
 Sri Lanka      6        5        4            86.7%   86.1%   81.6%       4.0%       4.2%       4.7%
 Philippines    47       48       48           96.3%   96.6%   96.9%       1.6%       1.4%       1.2%
 Myanmar        21       20       20           57.7%   61.8%   60.2%       29.3%      33.3%      33.1%
 Ghana          41       43       43           99.3%   99.4%   99.4%       0.2%       0.2%       0.2%
 Nigeria        37       38       40           90.3%   89.8%   90.6%       3.9%       3.9%       3.9%
 Sierra Leone   7        6        6            65.8%   78.4%   87.1%       6.8%       6.7%       5.3%
 Kenya          18       20       20           98.6%   98.7%   98.8%       0.5%       0.5%       0.4%
 Uganda         11       11       11           92.9%   93.7%   94.4%       0.4%       0.2%       0.1%
 Tanzania       38       40       42           99.1%   99.1%   99.1%       0.2%       0.1%       0.2%
 Rwanda         3        3        4            93.1%   93.2%   93.5%       3.1%       3.1%       3.0%
 Zambia         2        2        2            96.8%   95.8%   95.5%       1.1%       1.6%       2.4%
 Group          417      418      414          87.9%   89.0%   89.4%       4.6%       4.4%       4.2%

( )

                PAR>30                      PAR>90                      PAR>180
                Mar-22  Apr-22  May-22      Mar-22  Apr-22  May-22      Mar-22  Apr-22  May-22
 India (total)  15.4%   14.3%   13.1%       8.7%    7.9%    7.1%        6.2%    5.7%    5.2%
 Pakistan       0.2%    0.2%    0.2%        0.1%    0.1%    0.1%        0.0%    0.0%    0.0%
 Sri Lanka      6.6%    6.9%    7.4%        4.2%    4.6%    4.9%        2.6%    2.6%    2.7%
 Philippines    2.8%    2.8%    2.8%        2.1%    2.3%    2.4%        1.2%    1.4%    1.6%
 Myanmar        29.8%   33.8%   33.6%       1.0%    14.4%   24.7%       0.5%    0.4%    0.5%
 Ghana          0.3%    0.3%    0.3%        0.2%    0.2%    0.2%        0.1%    0.1%    0.1%
 Nigeria        6.2%    6.2%    6.1%        4.0%    4.1%    4.1%        2.3%    2.3%    2.2%
 Sierra Leone   9.5%    9.8%    10.1%       6.8%    7.5%    8.2%        2.7%    3.1%    4.7%
 Kenya          1.0%    0.9%    0.9%        0.7%    0.7%    0.7%        0.4%    0.4%    0.4%
 Uganda         2.0%    1.7%    1.5%        1.9%    1.6%    1.5%        1.6%    1.6%    1.4%
 Tanzania       0.4%    0.4%    0.4%        0.3%    0.3%    0.3%        0.2%    0.2%    0.2%
 Rwanda         5.1%    4.9%    4.7%        3.5%    3.3%    3.3%        2.0%    1.8%    1.7%
 Zambia         1.4%    1.9%    2.7%        0.6%    0.8%    1.1%        0.3%    0.3%    0.3%
 Group          6.7%    6.3%    6.0%        3.1%    3.5%    3.8%        2.1%    1.9%    1.8%
 ( )

 ((3))  Gross OLP includes the off-book BC and DA model, excluding interest
 receivable and before deducting ECL provisions and modification loss.

 ((4))  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 OLP including off-book loans. Loans overdue more than 365
 days now comprise 3% of the Gross OLP.

 ((5))  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 slightly decreased from 6.3% to 6.0%.

·    Credit exposure of the India off-book BC portfolio of USD 33.1m is
capped at 5%. The included off-book DA portfolio of USD 1.5m has no credit
exposure.

 

Disbursements vs collections of loans until 31 May 2022((6))

 Countries        Dec/21  Jan/22  Feb/22  Mar/22  Apr/22  May/22
 India            88%     78%     65%     62%     52%     72%
 Pakistan         100%    100%    96%     100%    117%    118%
 Sri Lanka        113%    70%     115%    122%    55%     42%
 The Philippines  81%     80%     93%     104%    112%    105%
 Myanmar          95%     99%     99%     116%    77%     106%
 Ghana            108%    74%     110%    115%    118%    112%
 Nigeria          93%     71%     98%     98%     110%    120%
 Sierra Leone     110%    97%     102%    113%    105%    93%
 Kenya            55%     95%     101%    113%    125%    112%
 Uganda           69%     81%     112%    118%    122%    112%
 Tanzania         107%    114%    112%    110%    130%    120%
 Rwanda           98%     65%     80%     107%    112%    129%
 Zambia           109%    76%     80%     109%    116%    125%
 ((6)) Disbursements vs collections refers to actual loan disbursements made to
 clients divided by total amounts collected from clients in the period.

·    Disbursements as percentage of collections exceeded 100% in 10
countries. The decreasing percentage in Sri Lanka was primarily due to the
political unrest.

 

Development of Clients and Outstanding Loan Portfolio until 31 May 2022

                   Clients (in thousands)           Delta                         Gross OLP (in USDm)           Delta
 Countries        May-21     Apr-22     May-22     May/21-May/22  Apr/22-May/22  May-21    Apr-22    May-22    May/21-May/22 USD  May/21-May/22 CC ((7))  Apr/22-May/22 USD
 India            724        465        462        -36%           -1%            168       98        94        -44%               -40%                    -4%
 Pakistan         462        552        561        21%            2%             76        84        80        5%                 36%                     -5%
 Sri Lanka        56         51         49         -12%           -4%            9         5         4         -51%               -9%                     -9%
 The Philippines  331        303        306        -8%            1%             55        48        48        -13%               -4%                     1%
 Myanmar          120        110        109        -9%            0%             24        20        20        -17%               -6%                     1%
 Ghana            157        164        165        4%             1%             46        43        43        -8%                24%                     -1%
 Nigeria          253        237        233        -8%            -2%            32        38        40        25%                26%                     4%
 Sierra Leone     40         41         40         0%             -3%            6         6         6         11%                41%                     -7%
 Kenya            109        127        131        21%            3%             16        20        20        23%                34%                     3%
 Uganda           86         96         100        16%            4%             9         11        11        16%                24%                     -2%
 Tanzania         141        195        199        41%            2%             27        40        42        55%                55%                     4%
 Rwanda           18         18         18         2%             2%             3         3         4         23%                27%                     7%
 Zambia           9          17         18         95%            4%             1         2         2         216%               142%                    5%
 Total            2,506      2,375      2,390      -5%            0.7%           472       418       414       -12%               0.3%                    -1.1%

( )

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

·    With the number of clients broadly stable at 2.4m, the strategic
reduction of disbursements in India and Sri Lanka and currency depreciation
versus USD across almost all markets, particularly in Pakistan (7%
depreciation in May), the Gross OLP decreased to USD 414m (1.1% lower than in
April 2022 and 12% lower than in May 2021).

·    Gross OLP for the Group in constant currency was at the same level as
May 2021 at USD 473m. Gross OLP in constant currency, excluding India, was USD
320m (23% higher than in May 2021).

Selected moratoriums((8)) on loan repayments until 31 May 2022

             Clients under moratorium (in thousands)
 Countries  Mar/22          Apr/22          May/22          As % of Total Clients
 India      205             205             205             44%
 Group      205             205             205             9%

 

             Moratorium amounts (USD thousands)
 Countries  Mar/22         Apr/22         May/22         May Moratoriums as % of OLP   As % of Total Moratoriums
 India      21,150         19,750         18,399         20%                          100%
 Group      21,150         19,750         18,399         4%                           100%

((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 to approximately 44% of clients
in India, who accepted to benefit from the one-time debt restructuring scheme
established by the RBI and confirmed in September 2021, which ends in June
2022. See RBI Covid-19 Restructuring Guidelines
(https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12086&Mode=0) .

·    The moratorium amount across the Group decreased to USD 18.4m, which
represents 4% of the Group's Gross OLP.

Key events in June 2022

·    Other than the existing partial lockdown and curfews in Myanmar, the
Company is not aware of any further restrictions implemented in its operating
countries as a result of the emergence of the Omicron variant up until 13 June
2022.

 

Enquiries:

ASA International Group plc

Head of Investor Relations
 
 

Véronique Schyns
 

IR@asa-international.com (mailto:IR@asa-international.com)

 

About ASA International Group plc

ASA International Group plc (ASAI: LN) 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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