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ASA International Group plc issued a business update on 21 September 2021, detailing operations as at 31 August 2021. The Group reported approximately USD 116m in unrestricted cash, secured USD 20m in new loans in August, and maintained a USD 149m funding pipeline. Group PAR>30 improved to 15.3% from 16.5% in July, while India's collections reached 60% and total moratoriums granted in August amounted to USD 48.8m, affecting 293,000 clients.
| Date | 21 Sept 2021 |
| Time | 07:01:04 |
| Category | Corporate updates |
| ID | 3794M |
ASA International Group plc August 2021 business update
Amsterdam, The Netherlands, 21 September 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 31 August 2021.
· Liquidity remains high with approximately USD 116m of unrestricted cash and cash equivalents across the Group.
· The pipeline of funding deals under negotiation totalled approximately USD 149m.
· With the exception of India, Sri Lanka, Myanmar, Sierra Leone, Uganda and Rwanda, all other operating companies achieved collection efficiency of more than 95%.
· India collections slightly improved to 60% as markets recover from recent lockdowns. Collection efficiency, excluding loans from clients receiving the one-time loan restructuring offered by the Reserve Bank of India ('RBI'), increased to 89% from 86% in July.
· Sri Lanka collections improved significantly until the imposition of nationwide lockdowns from 20 August to 13 September.
· No collections in Myanmar due to a stay-at-home policy mandated by the government from 17 July to 10 September due to a sharp increase of Covid-19 infections.
· Uganda collections did not improve due to local lockdowns and travel restrictions remaining in certain areas.
· 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 15.3% from 16.5% in July 2021, and PAR>90 slightly increasing to 11.3% from 11.0% in July 2021.
· The Group's operating subsidiaries, excluding India, the Philippines and Myanmar, collectively have been able to reduce PAR>30 to 3.1%.
· Disbursements as percentage of collections exceeded 100% in 5 countries with much lower percentages seen in India, Myanmar and Sri Lanka, due to the rapid spread of the Delta variant in these countries, which caused, amongst others, additional lockdowns and other Covid-19 related restrictions.
· The number of clients remained around 2.5m, while Gross OLP remained around USD 442m (7% higher than in August 2020).
· The moratoriums granted in August amounted to USD 48.8m, 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
· The immediate health impact of Covid-19 on the Company's operations substantially increased with 395 of over 12,800 staff members confirmed as infected since March 2020, with two deaths. Since March 2020, confirmed infections amongst 2.5m clients increased from 11,330 at the end of July 2021 to 16,644 as at 31 August 2021, resulting in 551 deaths since the start of the pandemic. Of the 551 client deaths across the Group, 407 are from Myanmar, with 214 of those deaths occurring in August 2021.
Funding
· Unrestricted cash and cash equivalents remained high at approximately USD 116m.
· The Company secured approximately USD 20m of new loans from local and international lenders in August 2021.
· The majority of the Company's USD 149m 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 August 2021 (1,2)
|
Countries |
Jan/21 |
Feb/21 |
Mar/21 |
Apr/21 |
May/21 |
Jun/21 |
Jul/21 |
Aug/21 |
|
India |
82% |
84% |
87% |
87% |
67% |
55% |
58% |
60% |
|
Pakistan |
98% |
99% |
99% |
99% |
99% |
99% |
99% |
99% |
|
Sri Lanka |
97% |
90% |
91% |
93% |
57% |
76%(3) |
76% |
80%(3) |
|
The Philippines |
75% |
80% |
85% |
84% |
89% |
99% |
100% |
99% |
|
Myanmar |
89% |
78% |
59% |
55% |
67% |
70% |
64%(4) |
Nil(5) |
|
Ghana |
99% |
100% |
100% |
100% |
99% |
99% |
99% |
99% |
|
Nigeria |
95% |
97% |
96% |
95% |
94% |
96% |
96% |
96% |
|
Sierra Leone |
95% |
89% |
96% |
93% |
92% |
94% |
93% |
92% |
|
Kenya |
97% |
98% |
100% |
100% |
99% |
99% |
99% |
99% |
|
Uganda |
87% |
93% |
99% |
100% |
100% |
95% |
83% |
84% |
|
Tanzania |
99% |
100% |
100% |
100% |
100% |
100% |
100% |
100% |
|
Rwanda |
93% |
91% |
96% |
95% |
96% |
96% |
96% |
94% |
|
Zambia |
100% |
100% |
100% |
100% |
99% |
100% |
100% |
99% |
|
(1) Collection efficiency refers to actual collections from clients divided by expected collections for the period; since any moratorium/restructuring on the repayment of loans are only granted to clients after the end of the month, the collection efficiency is not affected by the grant of such moratorium/restructuring. (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 and for 20 -31 August 2021 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 10 September 2021, announced by the Myanmar Government.
|
· Collection efficiency across the Group increased or remained broadly stable compared to the previous month in all countries.
· Collections in India improved marginally to 60% 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 89% from 86% in July.
· Collections in Sri Lanka increased to 80% prior to new nationwide lockdowns introduced from 20 August to 13 September 2021.
· No collections in Myanmar due to a stay-at-home policy announced by the government, which was caused by a sharp increase of Covid-19 infections.
· In Uganda collections remained unchanged with local lockdowns and travel restrictions remaining in certain areas.
Loan portfolio quality up to and including August 2021(6,7,8)
|
|
Gross OLP (in USDm) |
|
Non-overdue loans |
|
PAR>30 less PAR>180 |
|
|||||||||||||||
|
|
Jun/21 |
Jul/21 |
Aug/21 |
|
Jun/21 |
Jul/21 |
Aug/21 |
|
Jun/21 |
Jul/21 |
Aug/21 |
|
|||||||||
|
India (total) |
153 |
144 |
140 |
|
58.3% |
56.6% |
55.4% |
|
14.0% |
14.6% |
14.6% |
|
|||||||||
|
Pakistan |
75 |
74 |
74 |
|
98.4% |
98.4% |
98.4% |
|
0.3% |
0.3% |
0.3% |
|
|||||||||
|
Sri Lanka |
8 |
8 |
8 |
|
59.4% |
68.7% |
63.5% |
|
9.5% |
8.3% |
8.2% |
|
|||||||||
|
Philippines |
55 |
52 |
55 |
|
76.6% |
77.3% |
76.3% |
|
17.3% |
4.2% |
1.9% |
|
|||||||||
|
Myanmar |
24 |
24 |
23 |
|
64.7% |
50.4% |
98.8% |
|
0.5% |
24.2% |
0.6% |
|
|||||||||
|
Ghana |
46 |
43 |
44 |
|
99.0% |
98.9% |
98.8% |
|
0.2% |
0.3% |
0.3% |
|
|||||||||
|
Nigeria |
33 |
33 |
34 |
|
90.8% |
88.2% |
88.6% |
|
2.8% |
3.0% |
3.0% |
|
|||||||||
|
Sierra Leone |
6 |
6 |
7 |
|
93.5% |
81.9% |
81.1% |
|
2.5% |
2.5% |
2.6% |
|
|||||||||
|
Kenya |
17 |
18 |
18 |
|
87.6% |
88.5% |
90.1% |
|
0.6% |
0.5% |
0.5% |
|
|||||||||
|
Uganda |
9 |
8 |
8 |
|
69.3% |
62.6% |
70.9% |
|
0.6% |
5.7% |
8.7% |
|
|||||||||
|
Tanzania |
28 |
28 |
28 |
|
98.0% |
98.0% |
98.0% |
|
0.3% |
0.4% |
0.3% |
|
|||||||||
|
Rwanda |
3 |
3 |
3 |
|
89.5% |
87.0% |
85.8% |
|
2.9% |
3.2% |
2.9% |
|
|||||||||
|
Zambia |
1 |
1 |
1 |
|
98.9% |
98.0% |
96.3% |
|
0.3% |
0.5% |
0.5% |
|
|||||||||
|
Group |
457 |
442 |
442 |
|
78.3% |
77.0% |
79.6% |
|
7.4% |
7.2% |
5.6% |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
PAR>30 |
|
PAR>90 |
|
PAR>180 |
|
|||||||||||||||
|
|
Jun/21 |
Jul/21 |
Aug/21 |
|
Jun/21 |
Jul/21 |
Aug/21 |
|
Jun/21 |
Jul/21 |
Aug/21 |
|
|||||||||
|
India (total) |
30.5% |
34.2% |
35.9% |
|
21.0% |
22.8% |
24.8% |
|
16.5% |
19.6% |
21.3% |
|
|||||||||
|
Pakistan |
1.5% |
1.2% |
1.0% |
|
1.3% |
1.1% |
0.8% |
|
1.1% |
0.9% |
0.7% |
|
|||||||||
|
Sri Lanka |
12.2% |
10.8% |
10.8% |
|
4.0% |
5.1% |
5.9% |
|
2.8% |
2.5% |
2.6% |
|
|||||||||
|
Philippines |
19.9% |
19.5% |
19.1% |
|
19.3% |
18.8% |
18.1% |
|
2.6% |
15.4% |
17.2% |
|
|||||||||
|
Myanmar |
0.7% |
24.5% |
1.0% |
|
0.5% |
0.6% |
0.9% |
|
0.2% |
0.3% |
0.3% |
|
|||||||||
|
Ghana |
0.3% |
0.4% |
0.4% |
|
0.2% |
0.2% |
0.2% |
|
0.2% |
0.1% |
0.1% |
|
|||||||||
|
Nigeria |
5.0% |
5.1% |
5.0% |
|
3.3% |
3.6% |
3.6% |
|
2.3% |
2.1% |
2.0% |
|
|||||||||
|
Sierra Leone |
4.3% |
4.3% |
4.4% |
|
3.2% |
3.2% |
3.0% |
|
1.8% |
1.8% |
1.8% |
|
|||||||||
|
Kenya |
11.4% |
9.5% |
6.4% |
|
11.1% |
9.3% |
6.2% |
|
10.8% |
9.0% |
6.0% |
|
|||||||||
|
Uganda |
12.7% |
18.6% |
20.1% |
|
12.6% |
13.0% |
11.6% |
|
12.1% |
12.9% |
11.5% |
|
|||||||||
|
Tanzania |
1.6% |
1.6% |
1.1% |
|
1.5% |
1.4% |
0.9% |
|
1.3% |
1.3% |
0.8% |
|
|||||||||
|
Rwanda |
8.4% |
9.1% |
8.7% |
|
7.1% |
7.7% |
7.4% |
|
5.6% |
5.9% |
5.8% |
|
|||||||||
|
Zambia |
1.1% |
0.8% |
0.9% |
|
1.1% |
0.6% |
0.6% |
|
0.8% |
0.3% |
0.3% |
|
|||||||||
|
Group |
14.4% |
16.5% |
15.3% |
|
10.8% |
11.0% |
11.3% |
|
7.0% |
9.3% |
9.8% |
|
|||||||||
|
(6) Gross loan portfolio includes the off-book BC and DA model, excluding interest receivable and before deducting ECL provisions and modification loss. (7) 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. (8) 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 slightly to 15.3%, primarily due to the marginal improvements in Philippines, Kenya and Tanzania and moratoriums granted in India and Myanmar.
· Credit exposure of the India off-book BC portfolio of USD 36.3m is capped at 5%. The included off-book DA portfolio of USD 2.2m has no credit exposure.
Disbursements vs collections of loans until 31 August 2021(9)
|
Countries |
Jan/21 |
Feb/21 |
Mar/21 |
Apr/21 |
May/21 |
Jun/21 |
Jul/21 |
Aug/21 |
|
|
India |
90% |
104% |
131% |
71% |
3% |
5% |
25% |
36% |
|
|
Pakistan |
97% |
99% |
99% |
102% |
89%(10) |
102% |
98% |
103% |
|
|
Sri Lanka |
95% |
116% |
92% |
43% |
17% |
0% |
56% |
87% |
|
|
The Philippines |
113% |
101% |
96% |
88% |
91% |
88% |
87% |
91% |
|
|
Myanmar |
144% |
55% |
71% |
30% |
76% |
87% |
64% |
Nil(11) |
|
|
Ghana |
94% |
112% |
118% |
99% |
91%(10) |
99% |
85% |
112% |
|
|
Nigeria |
68% |
105% |
109% |
109% |
108% |
109% |
103% |
104% |
|
|
Sierra Leone |
89% |
109% |
110% |
95% |
101% |
118% |
119% |
133% |
|
|
Kenya |
97% |
113% |
107% |
100% |
100% |
93% |
107% |
97% |
|
|
Uganda |
46% |
99% |
99% |
105% |
99% |
53% |
60% |
93% |
|
|
Tanzania |
78% |
97% |
102% |
107% |
109% |
96% |
86% |
91% |
|
|
Rwanda |
60% |
73% |
86% |
95% |
106% |
81% |
61% |
95% |
|
|
Zambia |
137% |
140% |
115% |
107% |
142% |
170% |
103% |
102% |
|
|
(9) Disbursements vs collections refers to actual loan disbursements made to clients divided by total loans collected from clients in the period. (10) Slowdown in disbursements due to official EID holidays in second week of May. (11) Disbursements vs collections for August is nil due to the stay-at-home policy announced by the Myanmar Government.
|
|
||||||||
· With the business environment continuing to gradually improve in many countries, disbursements of new loans continued to stabilise or increase in amount and as a percentage of weekly collections, with the main exception of Myanmar, primarily due to the nationwide lockdowns.
Development of Clients and Outstanding Loan Portfolio until 31 August 2021
|
|
Clients (in thousands) |
Delta |
Gross OLP (in USDm) |
Delta |
|||||||
|
Countries |
Aug/20 |
Jul/21 |
Aug/21 |
Aug/20- Aug/21 |
Jul/21- Aug/21 |
Aug/20 |
Jul/21 |
Aug/21 |
Aug/20-Aug/21 USD |
Aug/20- Aug/21 CC (12) |
Jul/21 - Aug/21 USD |
|
India |
707 |
706 |
686 |
-3% |
-3% |
170 |
144 |
140 |
-18% |
-18% |
-3% |
|
Pakistan |
398 |
477 |
486 |
22% |
2% |
53 |
74 |
74 |
41% |
41% |
0% |
|
Sri Lanka |
56 |
53 |
53 |
-4% |
0% |
9 |
8 |
8 |
-5% |
2% |
0% |
|
The Philippines |
283 |
338 |
341 |
20% |
1% |
45 |
52 |
55 |
21% |
24% |
4% |
|
Myanmar |
136 |
119 |
118 |
-14% |
-1% |
31 |
24 |
23 |
-25% |
-9% |
-2% |
|
Ghana |
142 |
154 |
151 |
7% |
-1% |
38 |
43 |
44 |
16% |
21% |
2% |
|
Nigeria |
215 |
258 |
259 |
21% |
1% |
24 |
33 |
34 |
43% |
52% |
2% |
|
Sierra Leone |
31 |
40 |
42 |
36% |
4% |
4 |
6 |
7 |
86% |
96% |
10% |
|
Kenya |
79 |
116 |
118 |
50% |
2% |
12 |
18 |
18 |
48% |
50% |
1% |
|
Uganda |
90 |
83 |
83 |
-8% |
0% |
8 |
8 |
8 |
1% |
-2% |
3% |
|
Tanzania |
101 |
150 |
155 |
54% |
3% |
18 |
28 |
28 |
61% |
61% |
1% |
|
Rwanda |
19 |
17 |
17 |
-10% |
2% |
3 |
3 |
3 |
7% |
11% |
4% |
|
Zambia |
4 |
10 |
11 |
189% |
5% |
0 |
1 |
1 |
212% |
153% |
21% |
|
Total |
2,260 |
2,521 |
2,521 |
12% |
0% |
414 |
442 |
442 |
7% |
10% |
0.03% |
(12) Constant currency ('CC') implies conversion of local currency results to USD with the exchange rate from the beginning of the period.
· With disbursements stabilising or increasing in many countries, but significantly reduced or halted in India and Myanmar, Gross OLP remained stable at USD 442m in August 2021 compared to the previous month.
Selected moratoriums(13) on loan repayments until 31 August 2021
|
|
Clients under moratorium (in thousands) |
|
||
|
Countries |
Jun/21 |
Jul/21 |
Aug/21 |
As % of Total Clients |
|
India |
226 |
230 |
230 |
34% |
|
Pakistan |
0 |
0 |
0 |
0% |
|
Sri Lanka |
11 |
6 |
7 |
13% |
|
The Philippines |
0 |
0 |
0 |
0% |
|
Myanmar |
0 |
0 |
56 |
48% |
|
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 |
237 |
236 |
293 |
12% |
|
|
Moratorium amounts (USD thousands) |
|
|
||
|
Countries |
Jun/21 |
Jul/21 |
Aug/21 |
August moratoriums as % of OLP |
As % of Total Moratoriums |
|
India |
49,033 |
47,304 |
47,304 |
34% |
96.9% |
|
Pakistan |
0 |
0 |
0 |
0% |
0.0% |
|
Sri Lanka |
134 |
96 |
86 |
1% |
0.2% |
|
The Philippines |
0 |
0 |
0 |
0% |
0.0% |
|
Myanmar |
0 |
0 |
1,437 |
6% |
2.9% |
|
Ghana |
0 |
0 |
0 |
0% |
0.0% |
|
Nigeria |
0 |
0 |
0 |
0% |
0.0% |
|
Sierra Leone |
0 |
0 |
0 |
0% |
0.0% |
|
Kenya |
0 |
0 |
0 |
0% |
0.0% |
|
Uganda |
0 |
0 |
0 |
0% |
0.0% |
|
Tanzania |
0 |
0 |
0 |
0% |
0.0% |
|
Rwanda |
0 |
0 |
0 |
0% |
0.0% |
|
Zambia |
0 |
0 |
0 |
0% |
0.0% |
|
Total |
49,167 |
47,400 |
48,827 |
11% |
100.0% |
(13) 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 34% 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 48.8m, which represents 11% of the Group's Gross OLP.
Key events in August and September 2021
· National lockdowns remained in place in Sri Lanka and Myanmar ending on 21 September and 10 September respectively.
· In August, 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. The specific objectives of the Scheme are as follows:
o providing relief to stressed borrowers to encourage and help them to regularise their repayments; and
o providing partial/full relief from repaying loans to destitute borrowers with no capacity to repay.
o incentivizing borrowers for making regular repayments and maintaining good credit discipline.
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 [email protected]
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.