Last checked at 19 Oct 2021 07:00
Press release
ASA International Group plc September 2021 business update
Amsterdam, The Netherlands, 19 October 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 September 2021.
· Liquidity remains high with approximately USD 109m 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, Myanmar, Sierra Leone, and Uganda, all other operating companies achieved collection efficiency of more than 95%.
· India collections improved to 64% as markets 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'), increased to 96% from 89% in August.
· Sri Lanka operations were closed for the month due to the imposition of nationwide lockdowns from 20 August to 29 September.
· Low level of collections in Myanmar due to the extension of a stay-at-home policy mandated by the government from 17 July to 24 September, mainly caused by a sharp increase of Covid-19 infections.
· Uganda collections improved to 89% with fewer local lockdowns and travel restrictions across the country.
· Portfolio quality remained challenging, particularly in India, with benchmark PAR>30 for the Group, including off-book loans and excluding loans overdue more than 365 days, improving to 13.8% from 15.3% in August 2021, and PAR>90 improving to 10.2% from 11.3% in August 2021.
· 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 5.6% in August to 5.2% in September.
· The Group's operating subsidiaries, excluding India, the Philippines and Myanmar, collectively have been able to reduce PAR>30 to 2.6%.
· Disbursements as percentage of collections exceeded 100% in 6 countries with much lower percentages seen in India, Myanmar and Sri Lanka, due to the ongoing disruptions to our clients' business activities resulting from the high ongoing infection rates, which caused, amongst others, additional lockdowns and other Covid-19 related restrictions.
· The number of clients remained around 2.5m, while Gross OLP decreased to USD 437m (1% lower than in August 2021 and 3% higher than in September 2020).
· The moratoriums granted in September amounted to USD 45.4m, 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 430 of over 12,800 staff, with two deaths. Confirmed infections amongst 2.5m clients increased from 16,644 at the end of August 2021 to 18,218 as at 30 September 2021, resulting in 637 deaths since the start of the pandemic. Of the 637 client deaths across the Group, 444 are from Myanmar, with 37 of those deaths occurring in September 2021.
Funding
· Unrestricted cash and cash equivalents remained high at approximately USD 109m.
· The Company secured approximately USD 5m of new loans from local and international lenders in September 2021.
· The majority of the Company's USD 162m 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 September 2021(1, 2)
Countries | Jan/21 | Feb/21 | Mar/21 | Apr/21 | May/21 | Jun/21 | Jul/21 | Aug/21 | Sep/21 | |
India | 82% | 84% | 87% | 87% | 67% | 55% | 58% | 60% | 64% | |
Pakistan | 98% | 99% | 99% | 99% | 99% | 99% | 99% | 99% | 99% | |
Sri Lanka | 97% | 90% | 91% | 93% | 57% | 76%(3) | 76% | 80%(3) | Nil(3) | |
The Philippines | 75% | 80% | 85% | 84% | 89% | 99% | 100% | 99% | 96% | |
Myanmar | 89% | 78% | 59% | 55% | 67% | 70% | 64%(4) | Nil(5) | 55%(6) | |
Ghana | 99% | 100% | 100% | 100% | 99% | 99% | 99% | 99% | 99% | |
Nigeria | 95% | 97% | 96% | 95% | 94% | 96% | 96% | 96% | 95% | |
Sierra Leone | 95% | 89% | 96% | 93% | 92% | 94% | 93% | 92% | 91% | |
Kenya | 97% | 98% | 100% | 100% | 99% | 99% | 99% | 99% | 100% | |
Uganda | 87% | 93% | 99% | 100% | 100% | 95% | 83% | 84% | 89% | |
Tanzania | 99% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | |
Rwanda | 93% | 91% | 96% | 95% | 96% | 96% | 96% | 94% | 96% | |
Zambia | 100% | 100% | 100% | 100% | 99% | 100% | 100% | 99% | 100% | |
(1) Collection efficiency refers to actual collections from clients divided by expected 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 expected 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 2021 is only from clients who opted to repay instalments despite the ongoing lockdowns. |
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· Collection efficiency across the Group increased or remained broadly stable compared to the previous month in all countries.
· Collections in India improved to 64% 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 96% from 89% in August.
· No collections in Sri Lanka due to the nation-wide lockdown from 20 August to 29 September.
· Low level of collections in Myanmar due to a stay-at-home policy announced by the government, which was mainly caused by a sharp increase of Covid-19 infections.
· In Uganda collections improved to 89% with fewer local lockdowns and travel restrictions across the country.
Loan portfolio quality up to and including September 2021(7, 8, 9)
| Gross OLP (in USDm) |
| Non-overdue loans |
| PAR>30 less PAR>180 | ||||||
| Jul/21 | Aug/21 | Sep/21 |
| Jul/21 | Aug/21 | Sep/21 |
| Jul/21 | Aug/21 | Sep/21 |
India (total) | 144 | 140 | 132 |
| 56.6% | 55.4% | 56.9% |
| 14.6% | 14.6% | 13.9% |
Pakistan | 74 | 74 | 74 |
| 98.4% | 98.4% | 98.5% |
| 0.3% | 0.3% | 0.3% |
Sri Lanka | 8 | 8 | 8 |
| 68.7% | 63.5% | 79.4% |
| 8.3% | 8.2% | 8.8% |
Philippines | 52 | 55 | 54 |
| 77.3% | 76.3% | 76.4% |
| 4.2% | 1.9% | 2.2% |
Myanmar | 24 | 23 | 20 |
| 50.4% | 98.8% | 89.8% |
| 24.2% | 0.6% | 0.3% |
Ghana | 43 | 44 | 46 |
| 98.9% | 98.8% | 99.1% |
| 0.3% | 0.3% | 0.3% |
Nigeria | 33 | 34 | 35 |
| 88.2% | 88.6% | 89.9% |
| 3.0% | 3.0% | 3.0% |
Sierra Leone | 6 | 7 | 7 |
| 81.9% | 81.1% | 80.2% |
| 2.5% | 2.6% | 2.7% |
Kenya | 18 | 18 | 18 |
| 88.5% | 90.1% | 90.8% |
| 0.5% | 0.5% | 0.5% |
Uganda | 8 | 8 | 9 |
| 62.6% | 70.9% | 79.6% |
| 5.7% | 8.7% | 7.2% |
Tanzania | 28 | 28 | 29 |
| 98.0% | 98.0% | 98.1% |
| 0.4% | 0.3% | 0.3% |
Rwanda | 3 | 3 | 3 |
| 87.0% | 85.8% | 88.7% |
| 3.2% | 2.9% | 2.9% |
Zambia | 1 | 1 | 2 |
| 98.0% | 98.9% | 97.6% |
| 0.5% | 0.5% | 0.5% |
Group | 442 | 442 | 437 |
| 77.0% | 79.6% | 80.8% |
| 7.2% | 5.6% | 5.2% |
| PAR>30 |
| PAR>90 |
| PAR>180 |
| ||||||
| Jul/21 | Aug/21 | Sep/21 |
| Jul/21 | Aug/21 | Sep/21 |
| Jul/21 | Aug/21 | Sep/21 |
|
India (total) | 34.2% | 35.9% | 33.1% |
| 22.8% | 24.8% | 23.2% |
| 19.6% | 21.3% | 19.2% |
|
Pakistan | 1.2% | 1.0% | 0.8% |
| 1.1% | 0.8% | 0.7% |
| 0.9% | 0.7% | 0.5% |
|
Sri Lanka | 10.8% | 10.8% | 11.6% |
| 5.1% | 5.9% | 7.0% |
| 2.5% | 2.6% | 2.8% |
|
Philippines | 19.5% | 19.1% | 18.9% |
| 18.8% | 18.1% | 17.3% |
| 15.4% | 17.2% | 16.7% |
|
Myanmar | 24.5% | 1.0% | 1.0% |
| 0.6% | 0.9% | 0.9% |
| 0.3% | 0.3% | 0.7% |
|
Ghana | 0.4% | 0.4% | 0.3% |
| 0.2% | 0.2% | 0.2% |
| 0.1% | 0.1% | 0.0% |
|
Nigeria | 5.1% | 5.0% | 4.6% |
| 3.6% | 3.6% | 3.2% |
| 2.1% | 2.0% | 1.6% |
|
Sierra Leone | 4.3% | 4.4% | 4.4% |
| 3.2% | 3.0% | 2.8% |
| 1.8% | 1.8% | 1.8% |
|
Kenya | 9.5% | 6.4% | 3.1% |
| 9.3% | 6.2% | 2.8% |
| 9.0% | 6.0% | 2.6% |
|
Uganda | 18.6% | 20.1% | 16.3% |
| 13.0% | 11.6% | 9.9% |
| 12.9% | 11.5% | 9.1% |
|
Tanzania | 1.6% | 1.1% | 0.8% |
| 1.4% | 0.9% | 0.7% |
| 1.3% | 0.8% | 0.5% |
|
Rwanda | 9.1% | 8.7% | 8.1% |
| 7.7% | 7.4% | 6.5% |
| 5.9% | 5.8% | 5.2% |
|
Zambia | 0.8% | 1.1% | 0.7% |
| 0.6% | 1.0% | 0.4% |
| 0.3% | 0.6% | 0.2% |
|
Group | 16.5% | 15.3% | 13.8% |
| 11.0% | 11.3% | 10.2% |
| 9.3% | 9.8% | 8.6% |
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(7) Gross loan portfolio 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 outstanding loan portfolio including off-book loans. (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 13.8%, primarily due to the marginal improvements in India, Philippines, Kenya and Tanzania as well as moratoriums granted in India and Myanmar.
· Credit exposure of the India off-book BC portfolio of USD 35.2m is capped at 5%. The included off-book DA portfolio of USD 2.1m has no credit exposure.
Disbursements vs collections of loans until 30 September 2021(10)
Countries | Jan/21 | Feb/21 | Mar/21 | Apr/21 | May/21 | Jun/21 | Jul/21 | Aug/21 | Sep/21 | |
India | 90% | 104% | 131% | 71% | 3% | 5% | 25% | 36% | 52% | |
Pakistan | 97% | 99% | 99% | 102% | 89%(11) | 102% | 98% | 103% | 100% | |
Sri Lanka | 95% | 116% | 92% | 43% | 17% | 0% | 56% | 87% | Nil(13) | |
The Philippines | 113% | 101% | 96% | 88% | 91% | 88% | 87% | 91% | 89% | |
Myanmar | 144% | 55% | 71% | 30% | 76% | 87% | 64% | Nil(12) | 37% | |
Ghana | 94% | 112% | 118% | 99% | 91%(11) | 99% | 85% | 112% | 120% | |
Nigeria | 68% | 105% | 109% | 109% | 108% | 109% | 103% | 104% | 110% | |
Sierra Leone | 89% | 109% | 110% | 95% | 101% | 118% | 119% | 133% | 124% | |
Kenya | 97% | 113% | 107% | 100% | 100% | 93% | 107% | 97% | 100% | |
Uganda | 46% | 99% | 99% | 105% | 99% | 53% | 60% | 93% | 109% | |
Tanzania | 78% | 97% | 102% | 107% | 109% | 96% | 86% | 91% | 100% | |
Rwanda | 60% | 73% | 86% | 95% | 106% | 81% | 61% | 95% | 102% | |
Zambia | 137% | 140% | 115% | 107% | 142% | 170% | 103% | 102% | 102% | |
(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.
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· 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, with the main exception of Myanmar and Sri Lanka, primarily due to the nationwide lockdowns.
Development of Clients and Outstanding Loan Portfolio until 30 September 2021
| Clients (in thousands) | Delta | Gross OLP (in USDm) | Delta | |||||||
Countries | Sep/20 | Aug/21 | Sep/21 | Sep/20-Sep/21 | Aug/21-Sep/21 | Sep/20 | Aug/21 | Sep/21 | Sep/20-Sep/21 USD | Sep/20-Sep/21 CC (14) | Aug/21-Sep/21 USD |
India | 709 | 686 | 663 | -6% | -3% | 169 | 140 | 132 | -22% | -21% | -5% |
Pakistan | 400 | 486 | 495 | 24% | 2% | 54 | 74 | 74 | 37% | 41% | 0% |
Sri Lanka | 57 | 53 | 53 | -7% | -1% | 9 | 8 | 8 | -14% | -7% | -3% |
The Philippines | 262 | 341 | 345 | 32% | 1% | 47 | 55 | 54 | 14% | 20% | -2% |
Myanmar | 134 | 118 | 116 | -13% | -1% | 32 | 23 | 20 | -39% | -12% | -16% |
Ghana | 145 | 151 | 150 | 3% | -1% | 40 | 44 | 46 | 16% | 21% | 6% |
Nigeria | 222 | 259 | 253 | 14% | -3% | 26 | 34 | 35 | 35% | 44% | 3% |
Sierra Leone | 32 | 42 | 43 | 34% | 4% | 4 | 7 | 7 | 76% | 89% | 4% |
Kenya | 81 | 118 | 121 | 49% | 3% | 13 | 18 | 18 | 47% | 50% | 3% |
Uganda | 83 | 83 | 84 | 1% | 1% | 8 | 8 | 9 | 14% | 10% | 7% |
Tanzania | 104 | 155 | 161 | 54% | 4% | 19 | 28 | 29 | 53% | 52% | 4% |
Rwanda | 19 | 17 | 17 | -8% | 0% | 3 | 3 | 3 | 14% | 19% | 5% |
Zambia | 4 | 11 | 12 | 169% | 6% | 0.4 | 1 | 2 | 281% | 219% | 37% |
Total | 2,252 | 2,521 | 2,513 | 12% | -0.3% | 424 | 442 | 437 | 3% | 8% | -1% |
(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, but significantly below 100% in India, Sri Lanka, and Myanmar, Gross OLP reduced to USD 437m in September 2021 compared to the previous month.
Selected moratoriums(15) on loan repayments until 30 September 2021
| Clients under moratorium (in thousands) |
| ||
Countries | Jul/21 | Aug/21 | Sep/21 | As % of Total Clients |
India | 230 | 230 | 205 | 31% |
Pakistan | 0 | 0 | 0 | 0% |
Sri Lanka | 6 | 7 | 3 | 6% |
The Philippines | 0 | 0 | 0 | 0% |
Myanmar | 0 | 56 | 58 | 50% |
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 | 236 | 293 | 266 | 11% |
| Moratorium amounts (USD thousands) |
|
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Countries | Jul/21 | Aug/21 | Sep/21 | September moratoriums as % of OLP | As % of Total Moratoriums |
India | 46,547 | 46,547 | 44,204 | 33% | 97% |
Pakistan | 0 | 0 | 0 | 0% | 0% |
Sri Lanka | 96 | 86 | 29 | 0.4% | 0.1% |
The Philippines | 0 | 0 | 0 | 0% | 0% |
Myanmar | 0 | 1,262 | 1,187 | 6% | 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 | 46,643 | 47,895 | 45,420 | 10% | 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 33% 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 national lockdowns.
· The moratorium amount across the Group was USD 45.4m, which represents 10% of the Group's Gross OLP.
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 +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.