ASA International February 2022 business update

RNS Number : 5096F
ASA International Group PLC
22 March 2022
 

  Press release

 

ASA International Group plc February 2022 business update

Amsterdam, The Netherlands, 22 March 2022 - 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 28 February 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 211m.

· With the exception of India and Myanmar, all other operating subsidiaries continued to achieve collection efficiency of more than 90% and 9 countries achieved more than 95%.

· India collections remained at 76%, due to the substantial overdue collections and moratoriums provided to clients. Collection efficiency, excluding instalments due from clients receiving the one-time loan restructuring offered by the Reserve Bank of India ('RBI'), increased to 102%.

· Collections in Myanmar decreased to 72%, due to the ongoing conflict and an internet and electricity outage in the conflict affected areas.

· T he benchmark PAR>30 for the Group, including off-book loans and excluding loans overdue more than 365 days, slightly increased from 6.4% to 6.8%, primarily due to the end of the moratoriums in Myanmar, and PAR>90 decreased from 4.0% to 3.5%.

· The PAR>30 for the Group's operating subsidiaries, excluding India and Myanmar, slightly increased from 1.8% to 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 increased from 3.8% to 4.6%.

· Disbursements as percentage of collections exceeded 100% in 6 countries. The decreasing percentage in India was primarily due to the strategic decision to reduce disbursements.

· With the number of clients broadly stable at 2.4m (slightly higher than in January and 2.9% lower than in February 2021), and the continuing strategic focus in India on only collections , Gross OLP decreased to USD 424m (0.2% lower than in January 2022 and 7% lower than in February 2021).

· The moratorium amount decreased to USD 23.8 m, and is composed of the restructured loans of certain distressed clients in India as per the RBI guidelines. No other operating subsidiary granted moratoriums.

 

Health impact of COVID-19 on staff and clients

 

· Since March 2020, the number of staff members confirmed as infected by Covid increased to 549 of over 12,800 staff , with two deaths . Confirmed infections amongst 2.4m clients increased to 22,791 from 21,659 in the previous month, resulting in 697 deaths since the start of the pandemic. Of the 697 client deaths across the Group, 451 took place in Myanmar, with no deaths occurring in February 2022.

 

Funding

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

· The Company secured approximately USD 6m of new loans from local and international lenders in February 2022.

· The majority of the Company's USD 211m 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 28 February 2022 (1)  

Countries

Sep/21

Oct/21

Nov/21

Dec/21

Jan/22

Feb/22

 

India

64%

70%

69%

74%

76%

76%

 

Pakistan

99%

99%

99%

99%

99%

100%

 

Sri Lanka

Nil(2)

91%

92%

94%

93%

93%

 

The Philippines

96%

97%

97%

97%

98%

98%

 

Myanmar

55%(3)

68%(3)

75%(3)

78%(3)

78%(3)

72%(3)

 

Ghana

99%

100%

99%

99%

99%

99%

 

Nigeria

95%

96%

97%

96%

95%

96%

 

Sierra Leone

91%

93%

92%

92%

92%

92%

 

Kenya

100%

100%

100%

100%

99%

100%

 

Uganda

89%

94%

98%

100%

100%

100%

 

Tanzania

100%

100%

100%

100%

100%

100%

 

Rwanda

96%

97%

97%

97%

97%

97%

 

Zambia

100%

99%

99%

99%

100%

100%

 

(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) The collection efficiency for 1-29 September 2021 is nil due to the lockdowns in Sri Lanka.

(3) 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 76%, due to the substantial overdue collections and moratoriums provided to clients. Collection efficiency, excluding instalments due from clients receiving the one-time loan restructuring, increased to 102%.

· Collection efficiency in India, including regular and overdue collections as well as advance payments, increased to 101% as a percentage of the regular, realizable collections, including advance payments. The substantial difference 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.

· Collections in Myanmar decreased to 72%, due to the ongoing conflict and an internet and electricity outage in the conflict affected areas.

 

Loan portfolio quality up to and including February 2022 (5, 6, 7)

 

 Gross OLP (in USDm)

 

 Non-overdue loans

 

 PAR>30 less PAR>180

 

 

Dec/21

Jan/22

Feb/22

 

Dec/21

Jan/22

Feb/22

 

Dec/21

Jan/22

Feb/22

 

India (total)

  113

  111

  107

 

67.3%

68.8%

69.7%

 

12.3%

11.1%

10.2%

 

Pakistan

  79

  81

  83

 

99.7%

99.7%

99.7%

 

0.2%

0.2%

0.2%

 

Sri Lanka

  8

  8

  8

 

87.2%

85.3%

85.9%

 

3.6%

3.9%

4.1%

 

Philippines

  47

  46

  47

 

95.7%

94.9%

95.7%

 

2.3%

2.0%

1.9%

 

Myanmar

  20

  21

  21

 

97.8%

64.3%

58.5%

 

0.6%

1.0%

22.7%

 

Ghana

  49

  46

  44

 

99.3%

99.2%

99.3%

 

0.2%

0.3%

0.2%

 

Nigeria

  40

  37

  37

 

92.7%

90.9%

90.6%

 

2.8%

3.4%

3.6%

 

Sierra Leone

  7

  7

  7

 

87.4%

72.3%

71.1%

 

5.6%

6.5%

7.1%

 

Kenya

  17

  17

  18

 

98.6%

98.6%

98.6%

 

0.5%

0.5%

0.6%

 

Uganda

  10

  10

  10

 

89.8%

90.7%

91.7%

 

3.1%

1.9%

0.9%

 

Tanzania

  35

  36

  37

 

99.1%

99.1%

99.1%

 

0.2%

0.2%

0.1%

 

Rwanda

  3

  3

  3

 

92.9%

92.6%

92.4%

 

2.6%

3.0%

3.2%

 

Zambia

  2

  2

  2

 

98.2%

98.2%

97.7%

 

0.5%

0.5%

0.8%

 

Group

  429

  425

  424

 

89.1%

87.5%

87.7%

 

4.1%

3.8%

4.6%

 

 

 

 

 PAR>30

 

 PAR>90

 

 PAR>180

 

 

Dec/21

Jan/22

Feb/22

 

Dec/21

Jan/22

Feb/22

 

Dec/21

Jan/22

Feb/22

 

India (total)

22.8%

19.3%

17.1%

 

14.1%

11.6%

9.9%

 

10.5%

8.2%

6.9%

 

Pakistan

0.2%

0.2%

0.2%

 

0.2%

0.2%

0.1%

 

0.0%

0.0%

0.0%

 

Sri Lanka

6.0%

6.6%

6.9%

 

4.0%

4.0%

4.3%

 

2.5%

2.8%

2.8%

 

Philippines

2.5%

2.5%

2.7%

 

1.5%

1.9%

2.0%

 

0.3%

0.6%

0.8%

 

Myanmar

1.1%

1.6%

23.3%

 

0.7%

1.0%

0.9%

 

0.5%

0.6%

0.5%

 

Ghana

0.3%

0.3%

0.3%

 

0.2%

0.2%

0.2%

 

0.1%

0.1%

0.1%

 

Nigeria

4.6%

5.4%

5.8%

 

3.1%

3.6%

3.8%

 

1.8%

2.0%

2.2%

 

Sierra Leone

7.5%

8.7%

9.5%

 

4.0%

5.5%

6.2%

 

1.9%

2.2%

2.4%

 

Kenya

1.1%

1.0%

1.1%

 

0.8%

0.8%

0.8%

 

0.5%

0.5%

0.5%

 

Uganda

3.8%

2.9%

2.4%

 

3.4%

2.8%

2.3%

 

0.7%

0.9%

1.4%

 

Tanzania

0.5%

0.4%

0.4%

 

0.4%

0.4%

0.3%

 

0.3%

0.3%

0.3%

 

Rwanda

4.5%

4.8%

5.1%

 

3.2%

3.2%

3.3%

 

1.9%

1.8%

1.9%

 

Zambia

0.7%

0.8%

1.1%

 

0.5%

0.5%

0.5%

 

0.2%

0.2%

0.3%

 

Group

7.3%

6.4%

6.8%

 

4.6%

4.0%

3.5%

 

3.1%

2.6%

2.2%

 

 

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

(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 slightly increased to 6.8%, primarily due to the portfolio deterioration in Myanmar as moratoriums were no longer provided to clients with overdue loan payments.

· PAR>30 for Sierra Leone increased to 9.5% due to the increased OLP/client.

· Credit exposure of the India off-book BC portfolio of USD 33.7m is capped at 5%. The included off-book DA portfolio of USD 1.7m has no credit exposure.

 

Disbursements vs collections of loans until 28 February 2022 (8)

Countries

Sep/21

Oct/21

Nov/21

Dec/21

Jan/22

Feb/22

 

India

52%

39%

85%

88%

78%

65%

 

Pakistan

100%

100%

98%

100%

100%

96%

 

Sri Lanka

Nil(9)

86%

100%

113%

70%

115%

 

The Philippines

89%

90%

90%

81%

80%

93%

 

Myanmar

37%

73%

90%

95%

99%

99%

 

Ghana

120%

111%

114%

108%

74%

110%

 

Nigeria

110%

128%

134%

93%

71%

98%

 

Sierra Leone

124%

112%

112%

110%

97%

102%

 

Kenya

100%

96%

103%

55%

95%

101%

 

Uganda

109%

115%

121%

69%

81%

112%

 

Tanzania

100%

107%

109%

107%

114%

112%

 

Rwanda

102%

101%

105%

98%

65%

80%

 

Zambia

102%

110%

111%

109%

76%

80%

 

(8) Disbursements vs collections refers to actual loan disbursements made to clients divided by total amounts collected from clients in the period.

(9) Disbursements vs collections for September is nil due the nationwide lockdowns.

 

· Disbursements as percentage of collections exceeded 100% in 6 countries. The decreasing percentage in India was primarily due to the strategic decision to reduce disbursements.

 

Development of Clients and Outstanding Loan Portfolio   until 28 February 2022

 

 Clients (in thousands)

 Delta

 Gross OLP (in USDm)

 Delta

Countries

Feb/21

Jan/22

Feb/22

Feb/21-Feb/22

Jan/22-Feb/22

Feb/21

Jan/22

Feb/22

Feb/21-Feb/22 USD

Feb/21-Feb/22 CC (10)

Jan/22-Feb/22 USD

India

729

521

498

-32%

-4%

166

111

107

-35%

-34%

-3%

Pakistan

432

520

530

23%

2%

69

81

83

20%

34%

2%

Sri Lanka

56

52

52

-7%

0%

9

8

8

-10%

-7%

2%

The Philippines

313

290

295

-6%

2%

50

46

47

-7%

-2%

2%

Myanmar

128

112

111

-13%

-1%

30

21

21

-30%

-11%

1%

Ghana

154

158

161

4%

2%

44

46

44

-1%

16%

-5%

Nigeria

256

246

245

-4%

0%

32

37

37

16%

27%

-1%

Sierra Leone

38

43

43

12%

-2%

5

7

7

38%

59%

0%

Kenya

99

118

120

22%

2%

14

17

18

27%

32%

4%

Uganda

81

92

93

15%

2%

8

10

10

29%

25%

2%

Tanzania

129

179

185

44%

4%

22

36

37

64%

64%

3%

Rwanda

18

18

18

-1%

-1%

3

3

3

18%

22%

-1%

Zambia

6

15

16

145%

3%

0.6

2

2

280%

210%

2%

Total

2,439

2,364

2,368

-2.9%

0.1%

453

425

424

-7%

1%

-0.2%

 

(10) 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, and the continuing strategic focus in India on only collections , Gross OLP   decreased to USD 424m (0.2% lower than in January 2022 and 7% lower than in February 2021).  

 

Selected moratoriums (11) on loan repayments until 28 February 2022

 

 Clients under moratorium (in thousands)

 

Countries

Dec/21

Jan/22

Feb/22

As % of Total Clients

India

205

205

205

41%

Pakistan

0

0

0

0%

Sri Lanka

0

0

0

0%

The Philippines

0

0

0

0%

Myanmar

44

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

249

205

205

9%

 

 

 Moratorium amounts (USD thousands)

 

 

Countries

Dec/21

Jan/22

Feb/22

 February Moratoriums as % of OLP

 As % of Total Moratoriums

India

28,351

25,950

23,782

22%

100%

Pakistan

0

0

0

0%

0%

Sri Lanka

0

0

0

0%

0%

The Philippines

0

0

0

0%

0%

Myanmar

778

0

0

0%

0%

Ghana

0

0

0

0%

0%

Nigeria

0

0

0

0%

0%

Sierra Leone

0

0

0

0%

0%

Kenya

0

0

0

0%

0%

Uganda

0

0

0

0%

0%

Tanzania

0

0

0

0%

0%

Rwanda

0

0

0

0%

0%

Zambia

0

0

0

0%

0%

Total

29,129

25,950

23,782

6%

100%

(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 41% of clients in India, who accepted to benefit from the one-time debt restructuring scheme established by the RBI and confirmed in September 2021. See RBI Covid-19 Restructuring Guidelines .  

· The moratorium amount across the Group decreased to USD 23.8m, which represents 6 % of the Group's Gross OLP.

 

 

Key events in March 2022

· On 14 March 2022, the RBI announced new regulation for the microfinance sector in India, applicable to all banks, NBFC-MFIs and other participants in the microfinance sector. The Group's preliminary assessment is that this is a positive development for ASA India as it creates a level playing field in the microfinance sector. The key changes include the removal of the interest rate cap and margin cap, loans shall be collateral-free (also for banks providing microfinance loans), and lenders will be restricted to provide microfinance loans to clients up to a maximum of 50% of the client's household income. See Reserve Bank of India - Notifications (rbi.org.in)

· 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 17 March 2022.

 

Please note that, while the Company's operational performance appears to gradually normalize in most countries except for India and Myanmar, 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 as well as vaccine hesitancy in most of our operating countries, (iii) the risk of the introduction of more infectious Covid variants in our operating countries, 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 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.

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
 
 
TSTBRGDXCGDDGDB
UK 100

Latest directors dealings