ASA International Q2 2026: Loan Portfolio Passes $600 Million as India Exit Progresses

ASA International Group's second-quarter update shows a microfinance lender continuing to expand while reducing one of the biggest distractions in its portfolio.

Gross outstanding loan portfolio, or Gross OLP, passed $600 million for the first time, reaching $604.1 million at 30 June 2026. That was 4% higher than at the end of March and 12% ahead year-on-year.

The client base outside India also grew, while the planned wind-down of the Indian operation made significant further progress. However, investors should pay attention to a modest deterioration in overdue loans, particularly in East Africa and Southeast Asia.

The figures in the original company announcement are unaudited.

ASA International's Q2 2026 key figures

Metric	June 2025	March 2026	June 2026	Year-on-year change
Gross OLP	$540.9 million	$583.4 million	$604.1 million	12%
Gross OLP excluding India	$510.1 million	$576.0 million	$599.8 million	18%
Clients	2.58 million	2.72 million	2.74 million	6%
Clients excluding India	2.45 million	2.69 million	2.73 million	11%
PAR>30	2.0%	2.0%	2.4%	Up 0.4 percentage points
Branches	2,232	2,169	2,163	Down 3%

PAR>30 means portfolio at risk over 30 days. It measures the proportion of outstanding customer loans where at least one repayment is more than 30 days overdue, subject to the exclusions described by the company.

Growth remains broad, but not completely even

The headline growth rate looks healthy. Excluding India, Gross OLP increased by 18% in reported US dollar terms and 23% at constant currency. Constant currency removes the effect of exchange-rate movements, providing a clearer view of underlying local-market growth.

South Asia delivered the fastest reported expansion, with Gross OLP rising 42% year-on-year to $142.3 million. Pakistan was identified as one of the main contributors during the quarter.

East Africa remained the largest regional loan book at $208.9 million, up 30% year-on-year and 4% during Q2. Kenya contributed to quarterly growth, although credit quality across the region weakened.

West African Gross OLP increased 7% in reported currency to $163.2 million. The constant-currency increase was stronger at 15%, with Ghana among the major growth contributors. Clients in the region rose 5% year-on-year to 460,000.

Southeast Asia was the outlier in reported currency. Gross OLP fell 12% year-on-year to $85.4 million, but increased 13% at constant currency. That gap suggests exchange-rate movements had a substantial effect on the reported comparison.

For more background on the business, see the ASA International Group PLC company page.

Client growth supports the expansion story

The continuing operations served 2.73 million clients at the end of June, up 11% from a year earlier and 1% during the quarter.

Management said Q2 client growth was driven mainly by Pakistan, Kenya and Nigeria, with momentum accelerating in June. That is encouraging because sustainable loan growth needs to come from a broader customer base rather than simply larger average loans.

South Asia recorded the strongest regional client increase, rising 18% year-on-year to 847,000. East Africa followed with growth of 13% to 916,000, making it the group's largest region by client numbers.

The branch network outside India increased 3% year-on-year to 2,138 locations. The balance between physical expansion and the group's digital programme will be worth watching, particularly if technology can support growth without requiring branch numbers and operating costs to rise at the same pace.

Portfolio quality is the main point of caution

Group PAR>30 increased from 2.0% in June 2025 to 2.4% in June 2026. ASA International described that level as industry-leading, but the direction of travel still deserves attention.

The most notable deterioration was in East Africa, where PAR>30 rose from 1.3% to 2.9%. Management said new trade regulations in Uganda negatively affected clients and were one of the main drivers of the group's increase.

Southeast Asia continued to have the highest regional PAR>30 among the continuing operations, rising from 4.3% to 4.9%. By contrast, South Asia's measure improved from 1.0% to 0.6%, while West Africa moved from 0.9% to 1.9%.

These figures do not indicate a broad breakdown in credit quality, but they do show that conditions differ materially between regions. Investors will want to see whether the Ugandan pressure is temporary and whether Southeast Asia's overdue loan ratio can stabilise.

The update did not disclose quarterly revenue, profit, loan-loss provisions, cash generation or a quantified financial outlook. It therefore gives a useful view of operating momentum, but not enough information to assess the full effect of higher arrears on earnings.

India is becoming a much smaller problem

ASA International made substantial progress winding down its Indian operations during Q2.

Since the end of March, Indian client numbers fell 70% to 10,000, branches declined 67% to 25 and Gross OLP dropped 42% to $4.3 million. Compared with June 2025, the Indian loan book was down 86% and client numbers were 92% lower.

Management said the operation now has a minimal negative impact on the income statement. That is strategically important because India has become immaterial to the group's overall loan portfolio, although the exact remaining cost and timetable for completing the wind-down were not disclosed.

India's PAR>30 increased from 0.7% in March to 4.4% in June. With the underlying portfolio shrinking rapidly, percentages may become more volatile, but the remaining loans still need to be managed carefully.

Digital rollout moves beyond Tanzania

The enhanced banking platform and digital financial services app went live in Tanzania in March 2026. During Q2, preparations intensified for a rollout in Kenya and implementation began in Nigeria.

The investment case is straightforward: a scalable digital platform could support customer growth, improve service delivery and make expansion less dependent on adding physical infrastructure. However, the announcement did not disclose implementation costs, customer adoption, transaction volumes or financial benefits.

Readers can also compare the progress with ASA International's Q3 2025 growth and digital transformation update.

What investors should watch next

This was a broadly constructive operational update. Loan portfolio growth remained strong, the continuing client base expanded and the exposure to India was reduced further. Management said these trends supported its positive expectations for the second half of 2026, although no numerical guidance was provided.

The main counterweight is credit quality. PAR>30 remains relatively low at group level, but it has increased year-on-year, with East Africa and Southeast Asia requiring particular attention.

The next useful evidence will be whether accelerating client growth translates into profitable expansion, whether overdue loans stabilise and whether the digital rollout produces measurable operating benefits. Until fuller financial figures are available, Q2 shows encouraging momentum, but not the complete earnings picture.