Project description
and objectives:
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The proposed USD 30 million framework aims to increase financial
intermediation in the Mongolian banking sector. This project will permit
provision of term loans for on-lending transactions in favour of micro, small
and medium enterprises (MSMEs) to partner commercial banks, leasing companies,
consumer finance companies, non-bank finance institutions, pension companies
and insurance companies (collectively, NBFIs). In addition, the framework will
include equity investments in selected financial institutions.
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Sub-projects:
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- Xac Bank
- Mongolian Financial Sector Framework: Khan Bank
- Zoos Bank-Term Loan
- Mongolian Financial Sector F/w - XAC-GE LLC - Equity
- Zoos Bank - Equity
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Transition impact:
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The facility will increase intermediation in the financial sector through term
debt financing, which will enable a wide range of financing to reach end users
that presently have little or no alternatives for term funding. It will also
support the financial sector in Mongolia through a combination of debt and
equity financing and will promote the best practice in corporate governance
and strengthen financial discipline. Competition should also improve in the
sector by including several banks in the framework. The facility is expected
to show a demonstration effect as the first such multi-bank framework facility
by IFI.
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The client:
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Participating partner commercial banks and NBFIs.
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EBRD finance:
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USD 30 million in debt and equity facilities to financial intermediaries. The
first proposed transaction under the framework will be a USD 10 million loan
to Khan Bank.
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Total project cost:
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USD 30 million.
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Environmental impact:
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The project will comply with EBRD’s Environmental Procedures for Small and
Micro-Loans” and Environmental Procedures for EBRD Intermediated Lending
through Local Banks. The participating partner institutions shall comply with
local national environmental, health, safety and labour regulations and
standards as well as with the Core Conventions of the International Labour
Organisation related to child and forced labour and discrimination at work and
submit to EBRD Annual Environmental Report in a format and contents
satisfactory to the bank.
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Technical
cooperation:
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Technical cooperation (TC) funding of up to USD 6.5 million will be sought to
accompany the Framework in order to achieve the stated goals under this
framework. TCs will encompass a wide range of areas including but not limited
to credit advisors for on-lending to MSMEs and for residential mortgages,
associated projects with any equity transactions. The main rationale for the
proposed TC is to encourage partner institutions (commercial banks (FIs) and
non-bank financial institutions including microfinance institutions (NBFIs))
to develop into full-service banks serving MSMEs and individuals requiring
financing and other debt and/or savings products through a focused TA aimed at
delivering specific credit and management skills and setting up appropriate
institutional structures. ETC Fund is providing the initial EUR1 million to
improve MSME lending procedures, training personnel and providing support to
the institutions in maintaining high portfolio quality.
For consultant opportunities for projects financed by technical cooperation
funds, visit procurement
of consultants.
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Company contact:
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n/a
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EBRD contact:
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Oksana Pak, Operation Leader: pako@ebrd.com
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Business opportunities:
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For business opportunities or procurement, contact the client company.
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General enquiries:
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EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com
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