Investment case

Socially responsible services

Through the ASA Model of Microfinance

Through its heritage and close association with ASA, the Association of Social Advancement, based in Bangladesh, the Group has a long heritage in the microfinance industry. From inception, the Group benefited from early access to ASA NGO Bangladesh’s know-how, industry technical expertise and experts. The Group was founded to adapt the ASA Model to fit the diverse countries in Asia and Africa in which it has established its microfinance institutions. The ASA operating (lending) model is focused around six distinctive features, emphasising the Group’s social responsibility commitment to clients and staff:

• Loans with market-based interest rates
• Group selection without joint liability.
• Collateral-free loans with a moratorium on loan repayments in emergency situations.
• Loans for income-generating activity only.
• Full repayment before qualifying for new loans and repeat loan cycles with set limits.
• Training and development of operating staff in house and no bonus incentive.

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Diversified risk profile

Due to presence in thirteen emerging and frontier markets

The Group’s risk profile is diversified across thirteen markets in Asia and Africa. The impact of principal risks on its business is different from country-to-country, which benefits the Group.

The risk management features embedded in the ASA Model, such as managing credit risk, have a positive impact on the Group’s returns and risk profile. In 2023, as a result of the inflationary environment and currency depreciations the liquidity, exchange rate and inflation rate risks predominantly increased.

The addressable market is estimated at 378 million prospects in existing countries of operation, according to the World Bank. The Group is well placed to capture this significant breadth of market opportunity by continuing to increase its penetration in current as well as in future markets in Asia and Africa.

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Proven credit methodology

As a result of staying close to clients

Managing credit risk is an integral part of the Group’s operating model. Loan officers foster close client relationships, quickly identifying repayment or other issues, as well as disbursing new, higher loans to qualified clients.

The client assessment and admission process may take up to 14 days for a first cycle loan, ensuring only clients committed and able to grow their businesses are accepted and protecting clients from being over-leveraged.

The credit methodology results in low credit costs, which in combination with the low cost of operations, leads to attractive financial returns.

Highly scalable

Decentralised business model

The Group’s experienced management team makes sure the Group executes the ASA Model in a disciplined way across all markets. The operations are highly standardised through the use of an operations manual and are almost identical across all operations. Client selection and loan sizes are decided at branch level.

In addition to the branch model, a digital channel will be introduced via mobile devices, market-by-market over the coming years. Over time, the Group aims to offer deposits more widely and other digital financial services in all operations, on a country-by-country basis, depending on local demand and starting in the operations with deposit-taking licences.

In order to be able to offer clients and the wider public online deposits over time, which are a low-cost way of funding, the Group aims to obtain deposit-taking licences in all countries. Six countries currently have obtained deposit-taking licences.