ASA International (ASAI) became the first publicly listed microfinance company in Europe when its shares began trading on the premium segment of London’s main market in July. The group provides loans – backed by a guarantor – to female small business owners in Asia and Africa, which are typically paid back in weekly instalments of up to $10 (£7.68). Demand from those unable to gain credit from mainstream lenders is clear, with the group increasing the client base by more than a quarter during the first half to just over 2m. That helped push lending up almost a third to $314m.
The lender sets up branches in areas where it identifies demand for credit, growing the branch network by a fifth to 1,557 during the period. Those branches take around a year to break even, says chief executive Dirk Brouwer. However, the group still managed to reduce the cost-to-income ratio from 56.1 per cent to 53.5 per cent. Clients typically take out larger loans as their tenure as a customer progresses – the average outstanding loan per client was $164 at the end of June, up from $157 at the same time last year. Impairments also reduced, with those more than 30 days overdue falling to just 0.4 per cent of the loan book, from 0.7 per cent. The group also offers a deposit service, paying interest linked to the country’s base rate. Customer deposits increased a fifth during the period, representing 17.9 per cent of lending.
East Africa led the way in terms of lending growth, with loans up 62 per cent to $24.8m and net profits almost trebling to $1.6m. Meanwhile, the impairment rate also improved from 1.5 per cent to 0.4 per cent. However, although lending in Southeast Asia was up around a third year on year at $128m, that represented growth of just 2.4 per cent on the end of December, primarily due to a depreciation in the Indian and Pakistani Rupees against the US dollar.
Analysts at Investec expect adjusted net tangible assets of 93.5p a share at the December year-end, up from 81.8p at the same time last year.
| ASA INTERNATIONAL (ASAI) | ||||
| ORD PRICE: | 512p | MARKET VALUE: | £512m | |
| TOUCH: | 482-512p | 12-MONTH HIGH: | 520p | LOW: 314p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 98 | |
| NET ASSET VALUE: | 83p | LEVERAGE: | 5.2 | |
| Half-year to 30 Jun | Total operating income ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2017 | 44.6 | 19.1 | 3.5 | nil |
| 2018 | 55.5 | 17.5 | 2.3 | nil |
| % change | +24 | -8 | -34 | - |
| Ex-div: | na | |||
| Payment: | na |
