Project Data Sheet

Project Data Sheets (PDS) contain summary information on the project or program: Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

PDS Creation Date 06 Dec 2006
PDS Updated as of 21 Dec 2006

Project Name Rural Finance
Country Mongolia
Project/Program Number 28201-013
Status Approved
Geographical Location Phase I: Four aimags (provinces) Arhangay, Dundgovi, Dzavhan, and Sukhbaatar.Phase II: nationwide
In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
Sector and/or Subsector Classification Finance
/ Microfinance
Strategic Agendas
Drivers of Change
Gender Mainstreaming Categories

Financing

Type/Modality of Assistance Approval Number Source of Funding Approved Amount (thousand)
Loan1848-0
TOTAL US$ 0

Safeguard Categories

For more information about the safeguard categories, please see http://www.adb.org/site/safeguards/safeguard-categories

Environment B

Summary of Environmental and Social Issues

The potential negative environmental impacts of subprojects that may be financed under the Project were reviewed and found to be easily mitigated.

Environmental Aspects
Involuntary Resettlement
Indigenous Peoples

Stakeholder Communication, Participation and Consultation

During Project Design
During Project Implementation

Description

The long-term objective of the Project is to develop a sustainable rural financial system that will contribute to both economic growth and poverty reduction. The Project has two purposes: (i) to increase the availability of and access to savings and credit services in rural areas and among the poor, and (ii) to provide a focal point for rural communities to access information and resources to support economic activities to be financed by SCUs, and satisfy socially related information and training needs. The Project has three components: (i) development of rural SCUs; (ii) establishment of information and resource centers (IRCs); and (iii) capacity building in project management. The Project will initially be implemented on a pilot basis over three years in four aimags (Arhangay, Dundgovi, Dzavhan, and Sukhbaatar) and expanded nationwide during the remaining four years of the Project

Project Rationale and Linkage to Country/Regional Strategy

At present most of the rural population do not have access to formal savings and credit servcies; only about 3 percent have access to credit services from a bank or Government institutions. The financial sector faces many constraints in terms of liquidity and institutional capability, and delivery mechanisms in rural areas cannot satisfy the demand for financial services, particularly for those without collateral, including the poor and small enterprises. The informal sector also provides credit, but at a high cost. Thus alternative formal financial institutions are needed to offer a range of financial services on a sustainable basis. Such institutions must have a strong community focus to overcome existing negative social attitudes to credit and financial institutions which have developed in recent years due to failures in the banking system. The Government recognizes the need to revive the rural sector and sees microfinance playing a pivotal role. The establishment of a national SCU network is regarded as a viable alternative form of financial intermediation in rural areas. An unsupervised savings and credit union movement is emerging in Mongolia upon which a more solid, well-planned expansion of the system can be built. For SCUs to achieve significant outreach and long-term sustainability, the provision of financial services should encompass savings mobilization that provides resources at lower costs than borrowing from commercial sources and is more sustainable than externally funded credit lines that may be available only over a limited time frame. The introduction of incentives in the form of secure deposit facilities and interest rates that provide a real return on deposits will enable a significant volume of these savings to enter the financial system through SCUs. Monetizing the economy and providing local financial intermediation are as much a prerequisite to developing the rural economy as in increasing the supply of credit available to farmers and other rural residents. Establishing low minimum share contributions for SCU membership will also facilitate access to financial services for the rural poor who are effectively excluded from access to alternative savings and credit institutions. The development of an SCU supervision and regulation capability under the Project will offer improved protection for members' shares and savings in SCUs.

Development Impact

Project Outcome

Description of Outcome
Progress Towards Outcome

Outputs and Implementation Progress

Description of Project Outputs
Status of Implementation Progress (Outputs, Activities, and Issues)
Status of Development Objectives
Material Changes

Business Opportunities

Date of First Listing 2006 Dec 06
Consulting Services
A total of 52 person-monthss of consulting, comprising 37 person-months of international and 15 person-months of domestic consulting services, will be provided. Consultants will be selected and engaged through a firm in accordance with ADB's Guidelines on the Use of Consultants and other procedures acceptable to ADB for the selection and engagement of domestic consultants. Advance action for recruitment of consultants will be taken.
Procurement
All procurement under the Project will be carried out by the PMU in accordance with ADB's Guidelines for Procurement. Each supply contract for vehicles and equipment (other than minor equipment or materials) estimated to cost the equivalent of $500,000 or less will be awarded through international shopping. Contracts for minor equipment of materials estimated to cost $100,000 equivalent or less may be procured through direct purchase procedures.
Procurement and Consulting Notices
http://www.adb.org/projects/28201-013/business-opportunities

Timetable

Concept Clearance 26 Dec 1994
Fact-finding 10 Mar 2001 to 23 Mar 2001
Management Review Meeting 30 Apr 2001
Approval 25 Oct 2001
Last Review Mission

Milestones

Approval No. Approval Signing Effectivity Closing
Original Revised Actual
Loan 1848 25 Oct 2001 29 Jan 2002 29 Jul 2002 30 Jun 2009 09 Nov 2007

Utilization

Date Approval Number ADB (US$ thousand) Others (US$ thousand) Net Percentage
Cumulative Contract Awards
25 Jul 2014 Loan 1848 929 0 96.00%
Cumulative Disbursements
25 Jul 2014 Loan 1848 966 0 100.00%

Status of Covenants

Covenants are categorized under the following categories—audited accounts, safeguards, social, sector, financial, economic, and others. Covenant compliance is rated by category by applying the following criteria: (i) Satisfactory—all covenants in the category are being complied with, with a maximum of one exception allowed, (ii) Partly Satisfactory—a maximum of two covenants in the category are not being complied with, (iii) Unsatisfactory—three or more covenants in the category are not being complied with. As per the 2011 Public Communications Policy, covenant compliance ratings for Project Financial Statements apply only to projects whose invitation for negotiation falls after 2 April 2012.

Approval No. Category
Sector Social Financial Economic Others Safeguards Project Financial Statements
Loan 1848

Contacts and Update Details

Responsible ADB Officer Joji Tokeshi (jtokeshi@adb.org)
Responsible ADB Department East Asia Department
Responsible ADB Divisions Public Mgt, Financial Sector and Regional Coop Division, EARD
Executing Agencies Ministry of Finance

Links

Project Website http://www.adb.org/projects/28201-013/main
List of Project Documents http://www.adb.org/projects/28201-013/documents