ASA International Group (LSE:ASAI) reported that its gross outstanding loan portfolio, excluding India, rose 20% year-on-year to $630.6m as at 30 September, up 5% on the prior quarter.
The London-listed microfinance institution said Pakistan, Ghana, Kenya and Myanmar drove the growth, which it attributed partly to a strategy of rightsizing client loans to better match their working capital needs.
Portfolio quality deteriorated further in the quarter, with loans overdue by more than 30 days (PAR>30) rising to 2.9% from 2.4% at the end of the second quarter and 2.0% a year earlier.
The company's gross outstanding loan portfolio had already shown signs of strain in Uganda in the second quarter, when PAR>30 climbed to 2.4% amid new trade regulations there; this quarter it said Uganda also suffered an Ebola outbreak and a drought, prompting a short-term reduction in the portfolio, a strengthened group lending model and management changes to tighten local accountability and controls.
Stripping out the recent rise in Uganda, group PAR>30 held at 2.4%, unchanged from the second quarter.
The client base excluding India grew 9% year-on-year to 2.8m, up 2% in the quarter, led by Pakistan, Kenya, Nigeria and Tanzania.
The planned exit from India moved close to completion: clients fell to 9,000 since the end of the second quarter, the branch network dropped to zero operating branches, and gross outstanding loan portfolio in India fell to $3.4m.
The Reserve Bank of India approved the voluntary surrender of ASA India's NBFC-MFI licence on 31 August, and the company said its remaining 16 business correspondent branches are expected to transfer out by the end of October, with the India exit targeted for completion by the end of the year.
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"ASA International delivered another quarter of strong underlying growth, with Gross OLP increasing 20% year-on-year and 5% quarter-on-quarter in our markets with our client base expanding to 2.8 million customers," said chief executive Rob Keijsers.
"Remedial actions are already under way and are expected to become visible in the PAR levels in Uganda in the coming months," Keijsers said, adding that the company expects its portfolio to maintain solid growth through the rest of the year.