Mongolian Financial Sector Framework II

Location:

Mongolia

Project number:

44812

Business sector:

Depository Credit (banks)

Notice type:

Private

Environmental category:

FI

Target board date:

23 Jul 2014

Status:

Completed

Translated version of this PSD: Mongolian

Project Description

The EBRD is considering to continue its support for the financial sector in Mongolia with a new € 60 million finance framework for existing and new clients.

The Framework will increase the financing of MSMEs, including in local currency, and enhance lending and risk management skills in participating banks.

The first transaction under this framework will be an MSME loan to XacBank of US$ 5 mln to extend MSME lending to local borrowers.

Transition Impact

The transition impact of the proposed Framework will derive from (i) further improvement of financial intermediation in Mongolia and providing medium-term financing to the MSME sector, (ii) supporting new product development (i.e. Value Chain Finance) and thus improving access to finance for MSMEs, (iii) including new Participating Banks, and (iv) supporting Participating Banks to improve business procedures and risk management.

The Client

Commercial banks in Mongolia.

XacBank, the first transaction under the Framework, is the fourth largest bank in Mongolia with US$ 1.1 bn in assets and US$ 109 m in equity. XacBank is a retail and MSME-oriented bank with an extensive branch network.

EBRD Finance

€60 million Finance Framework.

Project Cost

€60 million.

Environmental Impact

Categorised FI. All Participating Banks (PBs) under the Framework will be required to comply with the EBRD's Performance Requirements 2 and 9.

This involves compliance with EBRD's Environmental and Social Exclusion and Referral Lists; requiring all clients to comply with national regulations and standards on environment, health and safety, labour, social issues and public consultation; and implementation of EBRD's Environmental and Social Procedures for Small and Micro Loans as outlined in the eManual.

All new PBs will be required to complete EBRD's Human Resources Due Diligence Questionnaire and E&S Due Diligence Questionnaires and submit those for EBRD's review to establish compliance with PRs 2 and 9.

Environmental and social due diligence training may be provided to new PBs. All PBs will be required to submit annual environmental and social reports to the EBRD.

Technical Cooperation

During the implementation of the Mongolian Financial Sector Framework II, new TC will be requested on a case-by-case basis where it is considered necessary to strengthen Participating Banks’ capacities. It is expected that TC will be needed in areas of risk management, new products development, institution building and corporate governance.

Company Contact

XacBank HQ Bldg, Ulaanbaatar-14200, Post Branch 20A, PO Box-721, MONGOLIA
E-mail: info@xacbank.mn
Website: www.xacbank.mn
Tel: +976 11 318185
Fax: +976 11 328701

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

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Text of the PIP

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Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.