Mongolian Financial Sector Framework

Location:

Mongolia

Project number:

37081

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Approval date:

18 Sep 2007

Status:

Approved

PSD disclosed:

22 Jun 2007

Project Description

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.

Transition Impact

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.

The Client

Participating partner commercial banks and NBFIs.

EBRD Finance

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.

Project Cost

USD 30 million.

Environmental Impact

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.

Technical Cooperation

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.

Company Contact

n/a

 

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

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out how to submit a Request for review through our confidential online form, by email, mail or telephone. IPAM is available to discuss your concerns and answer any questions you may have about the submission or handling of Requests, which follow the Project Accountability Policy and Guidance. Requestors’ identities may be kept confidential, upon request.

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