January 2021 business update

ASA International Group plc January 2021 business update

Amsterdam, The Netherlands, 26 February 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 January 2021.

·    Liquidity continues to remain high with approximately USD 109m of unrestricted cash and cash equivalents across the Group on 31 January 2021.

·    The pipeline of funding deals under negotiation totalled approximately USD 226m.

·    With the exception of India, the Philippines, Myanmar, and Uganda, all other operating countries achieved collection efficiency of more than 90% in January.

·    India marginally improved collections to 83% by the end of January as collections continue to be adversely affected by possible local Government regulatory changes in Assam, which also affected neighbouring districts in West Bengal (Jalpaiguri and Cooch Behar). In addition, collections also remained weak in in southern districts of West Bengal, including the Midnapore and the 24 Parganas, which were most severely affected by the cyclone Amphan in May 2020.

·    The Philippines improved collections to 80% by the end of January 2021 with no additional moratoriums granted within the month.

·    Uganda significantly improved collections reaching 89% by the end of January 2021.

·    Collections in Myanmar remained stable at 89-90% following the end of the Government lockdowns in Yangon and Bago Region. We expect some disruption to operations in February following the military's takeover of the Government and ongoing nation-wide protests.

·    Disbursements as percentage of collections exceeded 100% in many countries with the exception of India, Pakistan, Tanzania, Uganda, and Rwanda.

·    As a result, the number of clients and Gross OLP continued to gradually increase reaching approximately 2.4m and USD 449m (3% less than January 2020), respectively, across the Group.

·    The moratoriums granted for January 2021 amounted to USD 601K and were limited to the operations in Sri Lanka and Myanmar (lockdown Yangon and Bago Regions).

Health impact of COVID-19 on our communities

·    The immediate health impact of COVID-19 on the Company's operations remained low with 114 of our over 12,500 staff members confirmed as infected since March 2020, but with no deaths. Since March 2020, confirmed infections amongst our 2.4m clients increased from 1,536 at end of December 2020 to 1,632 as at 31 January 2021, resulting in 27 deaths since the start of the pandemic.

Funding

·    Unrestricted cash and cash equivalents remain high at approximately USD 109m on 31 January 2021.

·    The Company secured approximately USD 29m of new loans from local and international lenders in January 2021.

·    The majority of the Company's USD 226m 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 January 2021^{(1, 2, 3)} 

·    Collection efficiency across the Group remained stable in January in all countries with the exception of the Philippines and Uganda which saw an increase.

·    Collections in India increased marginally in January, as the environment remains challenging due to possible government intervention in Assam (approximately 16% of ASA India's loan portfolio) ahead or after scheduled elections, which adversely affected collections not only in Assam, but also in neighbouring districts in West Bengal, such as Jalpaiguri and Cooch Behar. Collections also remained relatively weak in southern districts of West Bengal, including the Midnapore and the 24 Parganas, which were most severely affected by the cyclone Amphan which hit West Bengal in May 2020.

·    In the Philippines, the government imposed 60-day grace period for the repayment of loans ended in December 2020 which contributed to an improvement in collections.

·    Despite that collections in Yangon and Bago divisions started again in January, after a two months lockdown, overall collection efficiency remained stable at 89-90%.

·    Uganda significantly improved collections reaching 89% by the end of January 2021.

Disbursements vs collections of loans until 31 January 2021⁽⁴⁾

·    With the business environment continuing to improve in most countries, disbursements of fresh loans continued to increase in amount and as a percentage of weekly collections, with the exception of Pakistan, Uganda, and Rwanda.

Development of Clients and Outstanding Loan Portfolio ⁽⁵⁾ until 31 January 2021

⁽⁵⁾ Gross loan portfolio including the off-book BC and DA model, excluding interest receivable and before deducting ECL provisions and modification loss.

·    With disbursements gradually increasing in many operating countries, Gross OLP increased to USD 449m in January 2021 compared to the previous month and ended up 3% below January 2020 in USD.

Selected moratorium⁽⁶⁾ on loan repayments until 31 January 2021

⁽⁶⁾ 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 were granted to clients in Sri Lanka and Myanmar and amounted to USD 601k, which represents 0.1% of the Group's Gross OLP for the month.

Please note that, while the Company's operational performance appears to gradually normalize, the risk of further challenges to our operations should not be underestimated due to (i) the still relatively high infection rates, (ii) the current lack of available vaccines in almost all our operating countries, (iii) the risk of the introduction of the more infectious COVID-19 variants in our operating countries as have been recently observed in the United Kingdom and South Africa, 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.