ULAANBAATAR, MONGOLIA (28 June 2024) — The Asian Development Bank (ADB) and Bogd Bank JSC have signed a $15 million loan to provide financing for micro, small, and medium-sized enterprises (MSMEs) in Mongolia, with a strong focus on women-led MSMEs and green finance.

The financing package comprises $14 million from ADB, with half earmarked for MSMEs led or owned by women, and $1 million from the Canadian Climate Fund for the Private Sector in Asia II (CFPS II) administered by ADB. The CFPS II concessional loan will be blended with ADB’s financing to fund climate finance initiatives for MSMEs, including purchasing energy-efficient equipment and small-scale renewable energy installations.

“Mongolia’s capital market needs further development, with financial institutions having limited access to foreign capital. ADB fills this financing gap by providing long-term financing to local lenders, thereby reducing lending costs for MSMEs,” said ADB Director General for Private Sector Operations Suzanne Gaboury. “Deploying blended and concessional lending will also enable Bogd Bank to offer new green finance products to the underserved MSME segment, stimulating growth and investments in energy-efficient equipment and small-scale renewable energy systems."

MSMEs play a vital role in Mongolia’s economy, accounting for most of all registered businesses and jobs while contributing 18% to the nation’s gross domestic product. However, access to credit is a significant barrier to their growth, with MSMEs accounting for less than a third of the total outstanding bank loans as of 2023. Mongolian women entrepreneurs face outsized challenges as they are less likely to receive loan approvals compared to men, despite comprising nearly half of the workforce and having higher payback rates.

“Bogd Bank is dedicated to empowering MSMEs, women-led enterprises, and fostering green initiatives in Mongolia. Partnering with an organization like ADB, which shares our vision of boosting Mongolia’s economy through impactful lending, perfectly aligns with our mission. We are thrilled to embark on this collaboration with ADB and are confident that it marks the beginning of a fruitful, long-term partnership,” says Bogd Bank Chief Executive Officer Saruul Ganbaatar.

Established in 2014, Bogd Bank operates 16 branches nationwide, employs 230 people, and has provided financial support to nearly 12,500 borrowers across multiple sectors. Bogd Bank's lending to MSMEs accounts for more than half of its portfolio, with a growing focus on women's businesses in trade, agriculture, and healthcare. In 2021, Bogd Bank became the first publicly listed bank on the Mongolian Stock Exchange.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region. 

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