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Mongolia: Supporting the Credit Guarantee System for Economic Diversification and Employment Project

Sovereign (Public) Project | 48015-002 Status: Active

The Asian Development Bank is working with Mongolia to improve access to finance for small and medium sized enterprises—which make up over 90% of all registered businesses in the country. The project is providing new financing guarantee products for the Credit Guarantee Fund of Mongolia, making it easier for smaller businesses to source long-term funds from banks.

Project Details

Project Officer
Giacomo Giannetto East Asia Department Request for information
Country
  • Mongolia
Modality
  • Loan
  • Technical Assistance
Sector
  • Finance
 
Project Name Supporting the Credit Guarantee System for Economic Diversification and Employment Project
Project Number 48015-002
Country Mongolia
Project Status Active
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 3338-MON: Supporting the Credit Guarantee System for Economic Diversification and Employment Project
Ordinary capital resources US$ 60.00 million
TA 9000-MON: Supporting the Credit Guarantee System for Economic Diversification and Employment Project
Technical Assistance Special Fund US$ 800,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Gender Equity and Mainstreaming
Governance and capacity development
Partnerships
Sector / Subsector

Finance / Small and medium enterprise finance and leasing

Gender Equity and Mainstreaming Some gender elements
Description
Project Rationale and Linkage to Country/Regional Strategy
Impact Job creation in nonmining-related sectors increased (SME Development Program, 2014 2016)
Project Outcome
Description of Outcome SMEs' access to finance expanded
Progress Toward Outcome Confirmation of loan effectiveness was obtained in April 2016. The loan agreement was signed and then ratified by Parliament in on 19 February 2016. The project agreement was signed by the Credit Guarantee Fund of Mongolia (CGFM) on 7 March 2016. Recruitment of the firm to perform capacity development under the piggy-back TA was completed in May 2016. The firm has been supporting the capacity development of the CGFM effectively through the end of the contract on 31 December 2018. Outreach training and informational sessions have been held to banks and SMEs on the program.
Implementation Progress
Description of Project Outputs

Longer-term financing for SMEs increased

A longer-term bank deposit market developed

Quality of the CGFM and the country's credit guarantee system improved

Status of Implementation Progress (Outputs, Activities, and Issues)

The first draw-down on the loan was made in December 2016. 5 PFIs have agreed to enter the project and contracts have been signed. A new guarantee product has been designed and a further 2 have been proposed. Issuance of new guarantees began in November 2017.

Demand for guarantees is high and well in excess of projections. A second drawdown occurred in June 2018.

The supporting TA work has ended on 31 December 2018 successfully. It supported creation of new products, marketing, reorganization of the CGFM, governance and transparency reforms in CGFM, outreach to PFIs and SMEs, and financial management reforms in CGFM.

The amended law on the CGFM is in final preparation, but as the working group membership has changed, no further work was completed and it is not certain when it would be submitted to Parliament.

A mid-term review of the project occurred in March 2019 with favourable results.

Geographical Location Nation-wide
Safeguard Categories
Environment FI
Involuntary Resettlement FI-C
Indigenous Peoples FI-C
Summary of Environmental and Social Aspects
Environmental Aspects No impact is expected
Involuntary Resettlement No impact is expected
Indigenous Peoples No impact is expected
Stakeholder Communication, Participation, and Consultation
During Project Design Government ministires, the BOM, the FRC, the CGFM, the small business chamber, private sector banks, EBRD, IFC, World Bank and JICA were all consulted during project due diligence.
During Project Implementation Regular discussion is held between ADB and both the implementing and executing agencies.
Responsible ADB Officer Giacomo Giannetto
Responsible ADB Department East Asia Department
Responsible ADB Division Public Mgt, Financial Sector and Regional Coop Division, EARD
Executing Agencies
Ministry of Finance (formerly Ministry of Finance and Economy)
[email protected]
S.Danzangiin Gudamj 5/1, Zasgiin Gazriin
II Bair, Ulaanbaatar 15160 Mongolia
Timetable
Concept Clearance 04 Dec 2014
Fact Finding 29 Jun 2015 to 11 Jul 2015
MRM 09 Sep 2015
Approval 27 Nov 2015
Last Review Mission -
Last PDS Update 27 Mar 2019

Loan 3338-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Nov 2015 08 Jan 2016 14 Apr 2016 31 Oct 2021 - -
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 90.00 Cumulative Contract Awards
ADB 60.00 27 Nov 2015 0.00 0.00 0%
Counterpart 30.00 Cumulative Disbursements
Cofinancing 0.00 27 Nov 2015 0.91 0.00 67%
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

TA 9000-MON

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
27 Nov 2015 23 Dec 2015 23 Dec 2015 31 Mar 2018 31 Mar 2019 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
800,000.00 0.00 30,000.00 0.00 0.00 0.00 830,000.00 27 Nov 2015 750,236.84
Status of Covenants
Category Sector Safeguards Social Financial Economic Others
Rating - - - - - Satisfactory

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.

The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

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.

Safeguard Documents See also: Safeguards

Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.


The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.

Tenders

No tenders for this project were found.

Contracts Awarded

Contract Title Approval Number Contract Date Contractor Contractor Address Executing Agency Contract Description Total Contract Amount (US$) Contract Amount Financed by ADB (US$)
Capacity Development Technical Assistance 9000 18 May 2016 Devpar Financial Consulting Limited (Canada) 158 Armour Ct. Cobourg, Ontario K91 4S6 Canada Ministry of Finance 606,447.00

Procurement Plan

None currently available.