November 2021 business update

RNS Number : 2605W

ASA International Group PLC

21 December 2021

 

Press release

ASA International Group plc November 2021 business update

Amsterdam, The Netherlands, 21 December 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 30 November 2021.

· Liquidity remains high with approximately USD 104m of unrestricted cash and cash equivalents across the Group.

· The pipeline of funding deals under negotiation totalled approximately USD 202m.

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

· India collections remained around 69%, as most states slowly recover from recent lockdowns. Collection efficiency, excluding instalments due from clients receiving the one-time loan restructuring offered by the Reserve Bank of India ('RBI'), remained broadly stable at 92%.

· Sri Lanka collections remained stable at 92%, following the end of nationwide lockdowns.

· Collections in Myanmar improved to 75% from 68% in October, despite the partial lockdown imposed by the local government.

· Uganda collections improved to 98% from 94% in October, with fewer local lockdowns and travel restrictions across the country.

· Portfolio quality remained challenging, particularly in India. However, the benchmark PAR>30 for the Group, including off-book loans and excluding loans overdue more than 365 days, improved to 10.1% from 11.8% in October, and PAR>90 improved to 7.2% from 8.6% in October.

· Excluding all loans which have been overdue for more than 180 days and, as a result, have been fully provided for, PAR>30 improved from 4.8% in October to 4.4%.

· The Group's operating subsidiaries, excluding India, the Philippines and Myanmar, collectively have been able to reduce PAR>30 to 1.7%.

· Disbursements as percentage of collections exceeded 100% in 9 countries with lower, though improved, percentages seen in India, Philippines, and Myanmar, as clients' businesses recover following prolonged market disruptions due to high Covid-19 infection rates, which caused, amongst others, lockdowns and other Covid-19 related restrictions.

· The number of clients remained around 2.5m, while Gross OLP increased to USD 450m (2% higher than in Oct ober 2021 and 2% higher than in November 2020).

· The moratoriums granted in No vember amounted to USD 32.6 m, primarily due to the loan restructuring of certain distressed clients in India as per the RBI guidelines.

Health impact of COVID-19 on staff and clients

· Since March 2020, the number of staff members confirmed as infected by Covid-19 increased to 446 of over 12,800 staff , with two deaths . Confirmed infections amongst 2.5m clients increased to 20,395 from 19,458 in the previous month, resulting in 679 deaths since the start of the pandemic. Of the 679 client deaths across the Group, 451 are from Myanmar, with no deaths occurring in November 2021.

Funding

· Unrestricted cash and cash equivalents remained high at approximately USD 104m.

· The Company secured approximately USD 13m of new loans from local and international lenders in November 2021.

· The majority of the Company's USD 202m 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 30 November 2021 ^{(1, 2)}  

Countries	Jan/21	Feb/21	Mar/21	Apr/21	May/21	Jun/21	Jul/21	Aug/21	Sep/21	Oct/21	Nov/21
India	82%	84%	87%	87%	67%	55%	58%	60%	64%	70%	69%
Pakistan	98%	99%	99%	99%	99%	99%	99%	99%	99%	99%	99%
Sri Lanka	97%	90%	91%	93%	57%	76%(3)	76%	80%(3)	Nil(3)	91%	92%
The Philippines	75%	80%	85%	84%	89%	99%	100%	99%	96%	97%	97%
Myanmar	89%	78%	59%	55%	67%	70%	64%(4)	Nil(5)	55%(6)	68%(6)	75%(6)
Ghana	99%	100%	100%	100%	99%	99%	99%	99%	99%	100%	99%
Nigeria	95%	97%	96%	95%	94%	96%	96%	96%	95%	96%	97%
Sierra Leone	95%	89%	96%	93%	92%	94%	93%	92%	91%	93%	92%
Kenya	97%	98%	100%	100%	99%	99%	99%	99%	100%	100%	100%
Uganda	87%	93%	99%	100%	100%	95%	83%	84%	89%	94%	98%
Tanzania	99%	100%	100%	100%	100%	100%	100%	100%	100%	100%	100%
Rwanda	93%	91%	96%	95%	96%	96%	96%	94%	96%	97%	97%
Zambia	100%	100%	100%	100%	99%	100%	100%	99%	100%	99%	99%
(1) Collection efficiency refers to actual collections from clients divided by realizable collections for the period. (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 realizable regular collections, actual overdue collections and actual advance payments. This also means that collection efficiency no longer can exceed 100%. (3) The collection efficiency for 1-15 June 2021, 20-31 August 2021, and 1-30 September is nil due to the lockdowns in Sri Lanka. Only the collection efficiency for 16-30 June 2021 and 1-19 August 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. (5) Collection efficiency for August 2021 is nil due to the stay-at-home policy from 1 August to 24 September 2021, announced by the Myanmar Government. (6) Collection for September, October and November 2021 is only from clients who opted to repay instalments despite the ongoing lockdowns.

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

· Collections in India remained around 69 %, as clients' businesses continue to slowly recover from the impact of recent lockdowns in most states. Collection efficiency, excluding instalments due from clients receiving the one-time loan restructuring, increased to 92%.

· Collection efficiency, including regular and overdue collections as well as advance payments, amounts to 92% 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.

· Collections in Sri Lanka remained stable at 92%, following the end of nation-wide lockdowns.

· Myanmar collections improved to 75%, despite the partial lockdown imposed by the government.

· In Uganda collections improved to 98%, with fewer lockdowns and travel restrictions in place.

Loan portfolio quality up to and including November 2021 ^{(7, 8, 9)}

		Gross OLP (in USDm)							Non-overdue loans							PAR>30 less PAR>180
		Sep/21		Oct/21		Nov/21			Sep/21		Oct/21		Nov/21			Sep/21		Oct/21		Nov/21
India (total)		132		125		125			56.9%		55.7%		57.7%			13.9%		13.3%		12.6%
Pakistan		74		76		77			98.5%		99.6%		99.7%			0.3%		0.2%		0.2%
Sri Lanka		8		8		8			79.4%		81.1%		82.5%			8.8%		6.4%		4.3%
Philippines		54		55		56			76.4%		77.7%		79.1%			2.2%		2.4%		2.1%
Myanmar		20		20		20			89.8%		98.6%		98.6%			0.3%		0.4%		0.4%
Ghana		46		47		49			99.1%		99.1%		99.2%			0.3%		0.3%		0.3%
Nigeria		35		37		41			89.9%		90.5%		90.9%			3.0%		2.9%		2.6%
Sierra Leone		7		7		7			80.2%		79.7%		78.8%			2.7%		3.2%		4.9%
Kenya		18		19		19			90.8%		91.1%		91.6%			0.5%		0.5%		0.4%
Uganda		9		10		10			79.6%		85.5%		89.1%			7.2%		5.5%		3.8%
Tanzania		29		31		33			98.1%		98.3%		98.4%			0.3%		0.3%		0.3%
Rwanda		3		3		3			88.7%		90.9%		92.7%			2.9%		2.8%		2.4%
Zambia		1		2		2			98.9%		97.7%		98.0%			0.5%		0.5%		0.5%
Group		437		440		450			80.8%		82.0%		83.2%			5.2%		4.8%		4.4%
	PAR>30							PAR>90							PAR>180
	Sep/21		Oct/21		Nov/21			Sep/21		Oct/21		Nov/21			Sep/21		Oct/21		Nov/21
India (total)	33.1%		29.4%		25.2%			23.2%		20.3%		16.5%			19.2%		16.0%		12.6%
Pakistan	0.8%		0.3%		0.3%			0.7%		0.2%		0.2%			0.5%		0.1%		0.0%
Sri Lanka	11.6%		9.1%		6.8%			7.0%		6.7%		5.2%			2.8%		2.8%		2.5%
Philippines	18.9%		18.2%		17.2%			17.3%		16.6%		16.0%			16.7%		15.8%		15.1%
Myanmar	1.0%		1.0%		1.0%			0.9%		0.8%		0.7%			0.7%		0.6%		0.5%
Ghana	0.3%		0.3%		0.3%			0.2%		0.2%		0.2%			0.0%		0.1%		0.1%
Nigeria	4.6%		4.5%		4.2%			3.2%		2.9%		2.8%			1.6%		1.6%		1.6%
Sierra Leone	4.4%		5.1%		6.8%			2.8%		3.2%		3.5%			1.8%		1.9%		1.9%
Kenya	3.1%		1.6%		1.0%			2.8%		1.3%		0.8%			2.6%		1.1%		0.6%
Uganda	16.3%		10.6%		5.6%			9.9%		7.1%		4.4%			9.1%		5.1%		1.8%
Tanzania	0.8%		0.6%		0.5%			0.7%		0.5%		0.4%			0.5%		0.3%		0.2%
Rwanda	8.1%		6.4%		4.7%			6.5%		4.6%		3.5%			5.2%		3.6%		2.3%
Zambia	1.0%		0.8%		0.7%			0.9%		0.4%		0.4%			0.6%		0.3%		0.2%
Group	13.8%		11.8%		10.1%			10.2%		8.6%		7.2%			8.6%		7.0%		5.7%
(7)  Gross OLP includes the off-book BC and DA model, excluding interest receivable and before deducting ECL provisions and modification loss. (8)  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 4% of the Gross OLP (9)  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 improved to 10.1%, primarily due to the marginal improvements in India, Sri Lanka, Philippines, Uganda, and Rwanda as well as moratoriums granted in India and Myanmar.

· Credit exposure of the India off-book BC portfolio of USD 33.4m is capped at 5%. The included off-book DA portfolio of USD 1.9m has no credit exposure.

 

Disbursements vs collections of loans until 30 November 2021⁽¹⁰⁾

Countries	Jan/21	Feb/21	Mar/21	Apr/21	May/21	Jun/21	Jul/21	Aug/21	Sep/21	Oct/21	Nov/21
India	90%	104%	131%	71%	3%	5%	25%	36%	52%	39%	85%
Pakistan	97%	99%	99%	102%	89%(11)	102%	98%	103%	100%	100%	98%
Sri Lanka	95%	116%	92%	43%	17%	0%	56%	87%	Nil(13)	86%	100%
The Philippines	113%	101%	96%	88%	91%	88%	87%	91%	89%	90%	90%
Myanmar	144%	55%	71%	30%	76%	87%	64%	Nil(12)	37%	73%	90%
Ghana	94%	112%	118%	99%	91%(11)	99%	85%	112%	120%	111%	114%
Nigeria	68%	105%	109%	109%	108%	109%	103%	104%	110%	128%	134%
Sierra Leone	89%	109%	110%	95%	101%	118%	119%	133%	124%	112%	112%
Kenya	97%	113%	107%	100%	100%	93%	107%	97%	100%	96%	103%
Uganda	46%	99%	99%	105%	99%	53%	60%	93%	109%	115%	121%
Tanzania	78%	97%	102%	107%	109%	96%	86%	91%	100%	107%	109%
Rwanda	60%	73%	86%	95%	106%	81%	61%	95%	102%	101%	105%
Zambia	137%	140%	115%	107%	142%	170%	103%	102%	102%	110%	111%
(10) Disbursements vs collections refers to actual loan disbursements made to clients divided by total loans collected from clients in the period. (11) Slowdown in disbursements due to official EID holidays in second week of May. (12) Disbursements vs collections for August is nil due to the stay-at-home policy announced by the Myanmar Government. (13) Disbursements vs collections for September is nil due the nationwide lockdowns.

· With the business environment continuing to gradually improve in many countries, disbursements of new loans continued to stabilise or increase as a percentage of weekly collections.

Development of Clients and Outstanding Loan Portfolio until 30 November 2021

	Clients (in thousands)			Delta		Gross OLP (in USDm)			Delta
Countries	Nov/20	Oct/21	Nov/21	Nov/20-Nov/21	Oct/21-Nov/21	Nov/20	Oct/21	Nov/21	Nov/20-Nov/21 USD	Nov/20-Nov/21 CC (14)	Oct/21-Nov/21 USD
India	713	645	629	-12%	-2%	166	125	125	-25%	-24%	0%
Pakistan	416	493	501	20%	2%	62	76	77	23%	36%	1%
Sri Lanka	55	52	52	-6%	0%	9	8	8	-7%	2%	2%
The Philippines	292	349	352	21%	1%	49	55	56	13%	18%	1%
Myanmar	128	114	113	-12%	-1%	30	20	20	-34%	-9%	0%
Ghana	158	153	158	0%	4%	41	47	49	18%	24%	3%
Nigeria	253	256	265	5%	4%	34	37	41	20%	30%	9%
Sierra Leone	37	44	45	24%	2%	4	7	7	57%	74%	0%
Kenya	90	124	129	44%	4%	13	19	19	47%	50%	4%
Uganda	82	86	91	11%	6%	8	10	10	23%	19%	6%
Tanzania	116	166	172	47%	3%	21	31	33	57%	56%	7%
Rwanda	19	17	18	-8%	2%	3	3	3	21%	25%	4%
Zambia	5	13	14	153%	10%	0.4	2	2	364%	294%	11%
Total	2,364	2,511	2,539	7%	1.1%	442	440	450	2%	8%	2%

⁽¹⁴⁾ Constant currency ('CC') implies conversion of local currency results to USD with the exchange rate from the beginning of the period.

· With disbursements as percentage of collections stabilising or exceeding 100% in many countries, Gross OLP increased to USD 450m (2% higher than in October 2021 and 2% higher than in November 2020).  

Selected moratoriums⁽¹⁵⁾ on loan repayments until 30 November 2021

	Clients under moratorium (in thousands)
Countries	Sep/21		Oct/21		Nov/21		As % of Total Clients
India	205		205		181		29%
Pakistan	0		0		0		0%
Sri Lanka	3		5		1		2%
The Philippines	0		0		0		0%
Myanmar	58		54		49		44%
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	266		264		232		9%
		Moratorium amounts (USD thousands)
Countries		Sep/21		Oct/21		Nov/21		November Moratoriums as % of OLP		As % of Total Moratoriums
India		37,590		34,958		31,647		25%		97%
Pakistan		0		0		0		0%		0%
Sri Lanka		28		71		12		0.1%		0.04%
The Philippines		0		0		0		0%		0%
Myanmar		1,242		1,003		896		4%		3%
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		38,860		36,033		32,556		7%		100%

⁽¹⁵⁾ 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 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 and Myanmar were due to disruption in operations following partial lockdowns.

· The moratorium amount across the Group was USD 32.6m, which represents 7% of the Group's Gross OLP.

 

Key events in November and December 2021

· In August 2021, ASA India and other MFIs signed the 'Assam Microfinance Incentive and Relief Scheme 2021', a MoU with the government of the State of Assam, with the objective to give incentives and relief to borrowers, who availed small loans from different MFIs in Assam. As off 28 November 2021, the first phase of the incentive programme has started.

· On the evening of 16 December 2021 Typhoon Rai (Odette) hit the Philippines, a strong typhoon, affecting the Visayas and Mindanao archipelagos, and some part of the Luzon archipelago. Pagasa Philippines reports that all 53 branches in Visayas and 30 branches in Mindanao have been affected. The exact number of damaged branches, affected staff and borrowers are yet to be determined. All necessary measures as per the disaster policy are being executed.

· Other than the existing partial lockdown and curfews in Myanmar, Uganda and Rwanda, 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 20 December 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, Myanmar and India, and (iv) the associated disruption this may cause to the businesses of our clients.

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Enquiries:

ASA International Group plc

Investor Relations      [phone]

Véronique Schyns    [e-mail]

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.

 

END

 

 

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