Investment case

Socially responsible services

Through the ASA Model of Microfinance

The Company has a long heritage in the microfinance industry. ASA, the Association of Social Advancement, became a microfinance institution in 1992, with heritage dating back to 1978. The ASA operating (lending) model is focused around six distinctive features, emphasizing the Company’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.

Diversified risk profile

Due to presence in thirteen emerging and frontier markets

The Group’s risk profile is diversified across thirteen high-growth 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 2021, as a result of the pandemic, health, regulatory, credit and growth risks were predominantly impacted.

The addressable market is large, which is estimated at c.334 million prospects in existing countries of operation, according to estimations by the World Bank. The Company 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.

Superior credit methodology

As a result of staying close to clients

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

The client selection and assessment 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.

Highly scalable

Decentralised business model

The Group’s experienced management team makes sure the Company 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 on a branch level.

In addition to the branch model, a digital channel will be introduced via smartphones and other mobile devices, market-by-market over the coming years. Over time, the Company aims to offer deposits 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 Company aims to obtain deposit-taking licences in all countries.