Mongolia: Banking Sector Rehabilitation and Financial Stability Strengthening Program
The Asian Development Bank is helping Mongolia restructure its banking sector, which suffers from high levels of non-performing loans, weak governance and a lack of competition. The program supports government policy actions to strengthen and stabilize the sector, including the development of an industry-restructuring plan and measures to improve governance, risk management and competition.
Project Details
-
Project Officer
Haydarov, Aziz K.
East Asia Department
Request for information -
Country/Economy
Mongolia -
Modality
- Loan
- Technical Assistance
-
Sector
- Finance
| Project Name | Banking Sector Rehabilitation and Financial Stability Strengthening Program | ||||||||||
| Project Number | 51054-001 | ||||||||||
| Country / Economy | Mongolia |
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| Project Status | Closed | ||||||||||
| Project Type / Modality of Assistance | Loan Technical Assistance |
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| Source of Funding / Amount |
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| Strategic Agendas | Inclusive economic growth |
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| Drivers of Change | Governance and capacity development |
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| Sector / Subsector | Finance / Finance sector development |
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| Gender Equity and Mainstreaming | No gender elements | ||||||||||
| Description | |||||||||||
| Project Rationale and Linkage to Country/Regional Strategy | |||||||||||
| Impact | The program is aligned with the government's Economic Recovery Plan, 2016 and will support the government's plans for a well-developed finance sector and a stable financial system that helps the poor and vulnerable. | ||||||||||
| Project Outcome | |
|---|---|
| Description of Outcome | Strengthened and stable banking industry |
| Progress Toward Outcome | The loan was approved in May 2017 and became effective in July 2017. Subsequently all policy actions were deemed to have been met and the loan was disbursed in full in August 2017. |
| Implementation Progress | |
| Description of Project Outputs | Framework for bank restructuring completed Financial stability enhanced Competition and governance strengthened |
| Status of Implementation Progress (Outputs, Activities, and Issues) | All policy actions have been met. The consulting firm for the piggy back TA was already mobilized and inception mission was held in November 2017. The intergovernmental working group on the establishment of a government-supported asset management company (AMC) has completed development of a legal framework for the AMC. Research has been completed and a preliminary proposal for an AMC structure was presented to the government in September 2018. The draft law reached parliament in July 2019 and has not progressed. A successful study tour was held to visit AMCs established in Spain and Ireland after the global financial crisis in 2008. The tour included members from the Bank of Mongolia and also a Mongolian Member of Parliament (MP). The draft law was prepared by the working group comprised of members of the Bank of Mongolia, Ministry of Finance and Ministry of Justice. The draft law was submitted to Parliament for consideration in July 2019. The draft law has incorporated recommendations of the TA team. Plans have been discussed with the government on the Privatization of State Bank LLC. The Government's plans for privatization have been paused. The TA team has provided support to the Mongolian Bankers Association on the potential to establish a private sector resolution program for non-performing loans. The progress to establish a corporate debt restructuring committee has stopped as the volume of loans that could potentially be included in a formal debt restructuring were identified as nominal because most loans are not funded in a lending syndicate. The banking sector continues to suffer from rising NPLs. Political will to move on the AMC or other NPL resolution mechanism has declined due in part to a cyclical rebound in the economy and upcoming elections. The piggyback TA is planned to close on 31 July 2020. |
| Geographical Location | Nation-wide |
| Safeguard Categories | |
|---|---|
| Environment | C |
| Involuntary Resettlement | C |
| Indigenous Peoples | C |
| Summary of Environmental and Social Aspects | |
|---|---|
| Environmental Aspects | NA |
| Involuntary Resettlement | NA |
| Indigenous Peoples | NA |
| Stakeholder Communication, Participation, and Consultation | |
| During Project Design | Close discussion was held with the the Bank of Mongolia and the Ministry of Finance. Additional discussion was held with the Mongolian Bankers Association. |
| During Project Implementation | Continued dialogue has been held with the Ministry of Finance, Bank of Mongolia and the Mongolian Bankers Association to track policy action compliance and monitor further progress. |
| Business Opportunities | |
|---|---|
| Consulting Services | ADB will engage TA consultants through a firm. Selection will follow ADB's Guidelines on the Use of Consultants (2013, as amended from time to time) using the quality- and cost-based method, with a quality cost ratio of 90:10, following a full technical proposal. The TA will provide 48 international and 31 national person-months of consulting services. |
| Responsible ADB Officer | Haydarov, Aziz K. |
| 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) Ministry of Finance [email protected] S.Danzangiin Gudamj 5/1, Zasgiin Gazriin II Bair, Ulaanbaatar 15160 Mongolia |
| Timetable | |
|---|---|
| Concept Clearance | 02 Mar 2017 |
| Fact Finding | 06 Feb 2017 to 17 Feb 2017 |
| MRM | 14 Mar 2017 |
| Approval | 30 May 2017 |
| Last Review Mission | - |
| Last PDS Update | 31 Mar 2020 |
Loan 3533-MON
| Milestones | |||||
|---|---|---|---|---|---|
| Approval | Signing Date | Effectivity Date | Closing | ||
| Original | Revised | Actual | |||
| 30 May 2017 | 31 May 2017 | 31 Jul 2017 | 31 Dec 2017 | - | 03 Aug 2017 |
| Financing Plan | Loan Utilization | ||||
|---|---|---|---|---|---|
| Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
| Project Cost | 100.00 | Cumulative Contract Awards | |||
| ADB | 100.00 | 01 Apr 2022 | 100.00 | 0.00 | 100% |
| Counterpart | 0.00 | Cumulative Disbursements | |||
| Cofinancing | 0.00 | 01 Apr 2022 | 100.00 | 0.00 | 100% |
TA 9320-MON
| Milestones | |||||
|---|---|---|---|---|---|
| Approval | Signing Date | Effectivity Date | Closing | ||
| Original | Revised | Actual | |||
| 30 May 2017 | 23 Jun 2017 | 23 Jun 2017 | 31 Jul 2019 | 31 Jul 2020 | 28 Aug 2020 |
| Financing Plan/TA Utilization | Cumulative Disbursements | |||||||
|---|---|---|---|---|---|---|---|---|
| ADB | Cofinancing | Counterpart | Total | Date | Amount | |||
| Gov | Beneficiaries | Project Sponsor | Others | |||||
| 1,500,000.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 1,500,000.00 | 01 Apr 2022 | 1,424,485.11 |
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.
| Title | Document Type | Document Date |
|---|---|---|
| Banking Sector Rehabilitation and Financial Stability Strengthening Program: Technical Assistance Completion Report | TA Completion Reports | Mar 2021 |
| Banking Sector Rehabilitation and Financial Stability Strengthening Program: Completion Report | Project/Program Completion Reports | Jul 2020 |
| Loan Agreement for Loan 3533-MON: Banking Sector Rehabilitation and Financial Stability Strengthening Program | Loan Agreement (Ordinary Resources) | May 2017 |
| Banking Sector Rehabilitation and Financial Stability Strengthening Program: Report and Recommendation of the President | Reports and Recommendations of the President | Apr 2017 |
| Banking Sector Rehabilitation and Financial Stability Strengthening Program: Concept Paper | Concept Papers | Mar 2017 |
| Банкны салбарыг нөхөн сэргээх, санхүүгийн тогтвортой байдлыг бэхжүүлэх хөтөлбөр : Төслийн МэдээллийнТайлан | Translated PDS | Mar 2017 |
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.
| Title | Document Type | Document Date |
|---|---|---|
| Banking Sector Rehabilitation and Financial Stability Strengthening Program: Environmental and Social Impact Matrix | Environmental and Social Impacts Matrix | Mar 2017 |
Evaluation Documents See also: Independent Evaluation
| Title | Document Type | Document Date |
|---|---|---|
| Mongolia: Banking Sector Rehabilitation and Financial Stability Strengthening Program | Validations of Project Completion Reports | Mar 2021 |
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 | Address | Executing Agency | Total Contract Amount (US$) | Contract Amount Financed by ADB (US$) |
|---|---|---|---|---|---|---|
| Capacity Development | Technical Assistance 9320 | 11 Oct 2017 | KOREA ASSET MANAGEMENT CORPORATION(KOREA, REPUBLIC OF) in association with FINANCIAL ACCESS CAPITAL PARTNERS B.V.(NETHERLANDS) | ASEM TOWER, WORLD TRADE CENTER 159-1 SAMSUNG-DONG, KANGNAM-KU SEOUL 135-798, KOREA | 1,259,000.00 | — |
Procurement Plan
None currently available.