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

ASA InternationalAnnouncement

18/11/2022 07:00

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RNS Number : 8344G  ASA International Group PLC  18 November 2022

 

ASA International Group plc October 2022 business update

Amsterdam, The Netherlands, 18 November 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 October 2022 compared to 31 August 2022.

·    Liquidity remains high with approximately USD 71 million of
unrestricted cash and cash equivalents across the Group, decreasing from USD
106 million in August, primarily due to loan repayments in September and
October.

·    The pipeline of funding deals under negotiation totalled approximately
USD 197 million.

·    With the exception of India, all other operating subsidiaries achieved
collection efficiency of more than 90% with 9 countries achieving more than
95%.

·    India collections remained broadly stable at 83%. Collection
efficiency, including regular and overdue collections as well as advance
payments, as a percentage of the regular, realisable collections, including
advance payments, decreased from 101% in August to 98% in October.

·    PAR>30 for the Group, including off-book loans and excluding loans
overdue more than 365 days, increased from 6.5% in August to 6.7% in October,
primarily due to the end of moratoriums in India as of June.

·    The PAR>30 for the Group's operating subsidiaries, excluding India
and Myanmar, remained stable 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 remained broadly
stable at 4.3%.

·    Disbursements as percentage of collections exceeded 100% in 12
countries. The decreasing percentage in India was due to the ongoing strategic
decision to reduce disbursements.

·    With the number of clients for the Group slightly decreasing, the
continuing strategic focus in India on primarily collections and the impact of
currency depreciation in almost all countries, the Group's Gross OLP decreased
to USD 358 million (3% lower than in August 2022 and 18% lower than in October
2021).

·    There were no moratoriums granted to clients in September and October
2022.

 

Funding

·    Unrestricted cash and cash equivalents remained high at approximately
USD 71 million.

·    The Company secured approximately USD 31 million of new loans from
local and international lenders in September and October 2022.

·    The majority of the Company's USD 197 million 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 October 2022((1))

 Countries        May/22    Jun/22    Jul/22    Aug/22    Sep/22    Oct/22
 India            83%       85%       86%       84%       86%       83%
 Pakistan         100%      100%      100%      99%       99%       99%
 Sri Lanka        92%       89%       89%       88%       90%       91%
 The Philippines  99%       100%      100%      100%      100%      99%
 Myanmar          73%((2))  78%((2))  80%((2))  84%((2))  88%((2))  92%((2))
 Ghana            100%      100%      100%      100%      100%      100%
 Nigeria          95%       96%       96%       96%       96%       96%
 Sierra Leone     96%       96%       96%       94%       94%       93%
 Tanzania         100%      100%      100%      100%      100%      100%
 Kenya            100%      100%      100%      100%      100%      100%
 Uganda           100%      100%      100%      100%      100%      100%
 Rwanda           97%       97%       97%       97%       97%       97%
 Zambia           98%       98%       98%       98%       98%       98%
 ((1)) Collection efficiency refers to actual collections from clients divided
 by realisable 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 realisable 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 increased or remained broadly stable in all
countries.

·    ASA India was closed for two weeks in October due to festivals, which
impacted collections.

·    Adjusted collection efficiency in India, including regular and overdue
collections as well as advance payments, as a percentage of the regular,
realisable collections, including advance payments, was at 98%.

The substantial difference of this adjusted collection efficiency metric is
related 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.

·    The superfloods and unusual rains in Pakistan from July until
September 2022 mostly affected Sindh and Baluchistan provinces including some
parts of Punjab, and mainly impacted ASA Pakistan's collections in Sindh.
Although market conditions in both Myanmar and Sri Lanka remained volatile,
conditions slightly improved.

 

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

                 Gross OLP (in USDm)                                           Non-overdue loans              PAR>30 less PAR>180
                Aug-22            Sep-22                 Oct-22               Aug-22   Sep-22   Oct-22       Aug-22      Sep-22      Oct-22
 India (total)          66                   57           52                  62.5%    60.1%    56.4%        16.1%       19.5%       21.9%
 Pakistan               77                   76           81                  98.6%    98.4%    98.6%        0.2%        0.4%        0.6%
 Sri Lanka                4                    4          4                   76.8%    80.4%    83.7%        8.9%        8.1%        7.0%
 Philippines            47                   46           46                  97.1%    97.0%    96.7%        0.5%        0.5%        0.5%
 Myanmar                17                   17           17                  68.6%    70.0%    70.8%        12.5%       7.8%        5.2%
 Ghana                  34                   34           27                  99.5%    99.5%    99.5%        0.1%        0.1%        0.1%
 Nigeria                41                   40           40                  91.0%    89.7%    90.1%        3.6%        3.5%        3.6%
 Sierra Leone             5                    5          5                   84.4%    86.6%    86.7%        4.3%        5.1%        5.5%
 Tanzania               44                   45           47                  99.4%    99.4%    99.4%        0.2%        0.2%        0.3%
 Kenya                  19                   20           21                  98.9%    98.9%    99.0%        0.4%        0.4%        0.4%
 Uganda                 10                   11           11                  98.6%    98.9%    98.4%        0.2%        0.3%        0.3%
 Rwanda                   4                    4          4                   94.1%    94.1%    94.1%        2.5%        2.4%        2.4%
 Zambia                   3                    3                  3           95.2%    94.7%    94.3%        2.6%        2.6%        2.3%
 Group                370                  361            358                 89.5%    89.7%    89.7%        4.2%        4.3%        4.3%

( )

                 PAR>30                              PAR>90                              PAR>180
                Aug-22   Sep-22   Oct-22            Aug-22   Sep-22   Oct-22            Aug-22   Sep-22   Oct-22
 India (total)  20.5%    23.7%    25.9%             6.0%     5.8%     17.0%             4.4%     4.2%     4.0%
 Pakistan       0.2%     0.4%     0.6%              0.1%     0.1%     0.1%              0.0%     0.0%     0.0%
 Sri Lanka      12.1%    11.2%    10.2%             6.3%     6.3%     6.0%              3.2%     3.2%     3.2%
 Philippines    2.2%     1.9%     1.7%              2.1%     1.8%     1.5%              1.7%     1.5%     1.2%
 Myanmar        30.8%    29.5%    28.8%             29.4%    28.7%    28.3%             18.3%    21.7%    23.6%
 Ghana          0.3%     0.3%     0.3%              0.2%     0.2%     0.2%              0.2%     0.1%     0.1%
 Nigeria        6.3%     6.4%     6.6%              4.7%     4.7%     4.7%              2.7%     2.9%     3.0%
 Sierra Leone   9.9%     10.1%    9.3%              7.8%     6.7%     5.6%              5.6%     5.0%     3.8%
 Tanzania       0.4%     0.4%     0.4%              0.2%     0.3%     0.3%              0.1%     0.1%     0.1%
 Kenya          0.9%     0.8%     0.8%              0.7%     0.6%     0.6%              0.5%     0.5%     0.4%
 Uganda         0.8%     0.6%     0.4%              0.7%     0.4%     0.2%              0.6%     0.3%     0.1%
 Rwanda         4.6%     4.4%     4.4%              3.3%     3.2%     3.2%              2.0%     2.0%     1.9%
 Zambia         3.4%     3.7%     4.0%              2.4%     2.7%     2.9%              0.8%     1.2%     1.7%
 Group          6.5%     6.7%     6.7%              3.5%     3.4%     4.9%              2.3%     2.4%     2.4%
 ( )

 ((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 2% 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.

·    Due to the continuing strategic focus in India on primarily
collections, Gross OLP in India further reduced to USD 52 million (21% lower
than in August 2022 and 58% lower than in October 2021).

·    PAR>30 for the Group slightly increased from 6.5% in August to 6.7%
in October as the portfolio quality in India decreased due to the end of
moratoriums in June.

·    Credit exposure of the India off-book BC portfolio of USD 21.2m is
capped at 5%. The included off-book DA portfolio of USD 1.0 million has no
credit exposure.

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

 Countries        May/22  Jun/22  Jul/22  Aug/22  Sep/22  Oct/22
 India            72%     42%     22%     25%     21%     10%
 Pakistan         118%    119%    113%    112%    115%    125%
 Sri Lanka        42%     61%     11%     93%     125%    147%
 The Philippines  105%    104%    104%    104%    103%    103%
 Myanmar          106%    85%     84%     95%     113%    102%
 Ghana            112%    110%    91%     100%    110%    122%
 Nigeria          120%    117%    100%    104%    106%    107%
 Sierra Leone     93%     99%     84%     80%     123%    128%
 Tanzania         120%    109%    106%    111%    109%    114%
 Kenya            112%    92%     105%    87%     120%    115%
 Uganda           112%    97%     97%     100%    111%    112%
 Rwanda           129%    119%    113%    116%    118%    113%
 Zambia           125%    133%    109%    110%    112%    109%
 ((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 12
countries. The decreasing percentage in India was due to the ongoing strategic
decision to reduce disbursements.

 

Development of Clients and Outstanding Loan Portfolio until 31 October 2022

                   Clients (in thousands)           Delta                         Gross OLP (in USDm)           Delta
 Countries        Oct/21     Aug/22     Oct/22     Oct/21-Oct/22  Aug/22-Oct/22  Oct/21    Aug/22    Oct/22    Oct/21-Oct/22 USD  Oct/21-Oct/22 CC((7))  Aug/22-Oct/22 USD
 India            630        417        337        -47%           -19%           124       66        52        -58%               -54%                   -21%
 Pakistan         495        590        605        22%            3%             76        77        81        7%                 38%                    4%
 Sri Lanka        53         45         47         -11%           5%             8         4         4         -51%               -11%                   10%
 The Philippines  345        321        327        -5%            2%             55        47        46        -15%               -3%                    -1%
 Myanmar          116        104        105        -9%            1%             20        17        17        -12%               3%                     2%
 Ghana            149        170        171        15%            1%             47        34        27        -44%               29%                    -21%
 Nigeria          253        242        241        -5%            -1%            37        41        40        9%                 16%                    0%
 Sierra Leone     43         37         37         -14%           1%             7         5         5         -31%               9%                     -8%
 Tanzania         161        204        211        31%            4%             31        44        47        51%                53%                    6%
 Kenya            121        134        140        16%            5%             19        19        21        10%                20%                    10%
 Uganda           84         105        108        28%            2%             10        10        11        16%                24%                    8%
 Rwanda           17         20         21         19%            4%             3         4         4         34%                42%                    6%
 Zambia           12         20         21         84%            6%             2         3         3         102%               89%                    4%
 Total            2,479      2,409      2,371      -4%            -2%            438       370       358       -18%               1.2%                   -3%

( )

((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 for the Group slightly decreasing, the
continuing strategic focus in India on primarily collections and the impact of
currency depreciation in almost all countries, the Group's Gross OLP decreased
to USD 358 million (3% lower than in August 2022 and 18% lower than in October
2021).

 

Key events in November 2022

·    Other than the existing partial curfews in Myanmar, the Company is not
aware of any further restrictions implemented in its operating countries up
until 17 November 2022.

 

---

 

 

Enquiries:

ASA International Group plc

Investor Relations
 
                           +31 6 2030 0139

Véronique Schyns
 
vschyns@asa-international.com (mailto:vschyns@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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