Project number:


Business sector:

Financial institutions

Notice type:


Environmental category:


Approval date:

05 Sep 2006



PSD disclosed:

26 Jul 2006

Project Description

This PSD and the investment are subject to the entry into force of the amendment to the Agreement Establishing the Bank (Article 1) to admit Mongolia as a country of operations on 15 October 2006.

The proposed project is a senior loan to Xac Bank, a Mongolian commercial bank focused on microfinance and small business lending, for on-lending to private micro and small enterprises (MSEs) across Mongolia.

Transition Impact

Transition impact will be achieved through the strengthening of this leading local bank which focuses on financing MSEs business needs. The proposed loan will help Xac Bank to further expand its outreach to regions outside of the capital. Further improvements in operational efficiency and increased amounts of MSE financing available through commercial banks are expected to encourage competition in this sector.

The Client

Xac Bank is the largest micro-finance institution in Mongolia with 55 branches (including sub-branches) located in each of the country's regional centres, including Ulaanbaatar. Xac Bank is a privately owned institution with shares currently being held by the XAC-GE Group, a holding company (99.8%). XAC-GE Group’s current owners consist of Mercy Corps (20.06%), three local companies (Tuushin Co., EIT and NewCom (27.26%) and five local NGOs (15.88%). The Triodos Doen Fund, ShoreCap International and MicroVest hold 12.45%, 12.45% and 10.22% of XAC-GE Group’s shares respectively. The remaining 1.68% is owned by Xac Bank’s employees.

EBRD Finance

Senior loan of USD 5 million.

Project Cost

USD 5 million.

Environmental Impact

Xac Bank shall introduce into its loan appraisal procedure, implement and comply with the EBRD Environmental Procedures for Small Loans, which include: compliance with applicable national environmental, health, safety and labour requirements; adherence to the Environmental Exclusion and Referral Lists; and submission of annual environmental reports to the Bank. Xac Bank will benefit from environmental training for Mongolian FIs that is planned by the EBRD.

Technical Cooperation

Xac Bank will benefit from technical assistance under the Mongolia Multi-Bank Framework. The Framework is designed to encourage EBRD’s partner institutions (commercial banks and non-bank financial institutions including microfinance institutions) to develop credit and management skills, set up appropriate institutional structures for MSE and SME lending and diversify into new financial products such as leasing, mortgage and trade finance.

Company Contact

Ganhuyag Ch. Hutagt, Executive Director
Xac Bank Mongolia

Tel: +976 11 318185
Fax: +976 11 328701

E-mail: ganhuyag.ch@xacbank.mn
Website: www.xacbank.mn


Business opportunities

For business opportunities or procurement, contact the client company.

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Email: procurement@ebrd.com

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Text of the PIP

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