Mongolia : Bogd Bank Financing Micro, Small and Medium-Sized Enterprises and Promoting Green Lending Activities Project

Nonsovereign Project | 57132-001

ADB will provide a senior unsecured loan of up to $15 million with a tenor of up to 3 years to Bogd Bank to fund subloans to MSMEs. The ADB Loan comprises two tranches: (a) tranche A of $14 million for multi-sector finance to MSMEs with a minimum of 50% to be disbursed to WMSMEs; and (b) tranche B of $1 million for climate finance to MSMEs.

Project Details

  • Project Officer
    Huang, Biao
    Private Sector Operations Department
    Request for information
  • Approval Date
    20 February 2024
  • Country/Economy
    Mongolia
  • Sector
    • Finance
Project Name
Bogd Bank Financing Micro, Small and Medium-Sized Enterprises and Promoting Green Lending Activities Project
Project Number
57132-001
Borrower / Company
  • Bogd Bank JSC
Country / Economy
  • Mongolia
Location
Nation-wide
Type or Modality of Assistance
Approval Number Facility Fund Source Amount Status
4436 Loan Ordinary capital resources USD 14.00 million Approved
8472 Loan Canadian Climate Fund for the Private Sector in Asia II (CFPS II) USD 1.00 million Approved
Operational Priorities
  • OP2: Accelerating progress in gender equality
  • OP3: Tackling climate change, building climate and disaster resilience, and enhancing environmental sustainability
Sector / Subsector
  • Finance / Small and medium enterprise finance and leasing

Gender
Gender equity theme
Project Sponsor(s)
    Description
    ADB will provide a senior unsecured loan of up to $15 million with a tenor of up to 3 years to Bogd Bank to fund subloans to MSMEs. The ADB Loan comprises two tranches: (a) tranche A of $14 million for multi-sector finance to MSMEs with a minimum of 50% to be disbursed to WMSMEs; and (b) tranche B of $1 million for climate finance to MSMEs.
    Objectives and Scope
    By improving access to finance, the project will support the expansion of MSMEs and diversification of the economy, which will contribute to employment and poverty reduction in Mongolia. The project will also promote green lending activities to MSMEs.
    Linkage to Country/Regional Strategy
    The project aligns with the operational focus area of expanding financing to MSMEs and to women in the Strategy 2030 Finance Sector Directional Guide. The project builds on previous ADB support for MSME financing in Mongolia and reflects the lessons learned from earlier projects. While their performances were impacted by various economic crises (with MSME loan portfolio growth targets being missed), all prior ADB loans remained performing, highlighting the importance of selecting solid financial institution partners, performing thorough due diligence, and setting realistic development targets in project designs.

    Safeguard Categories

    Environment
    FI
    Involuntary Resettlement
    FI-C
    Indigenous Peoples
    FI-C

    Summary of Environmental and Social Aspects

    Environmental Aspects
    Bogd Bank has incorporated environment and social (E&S) aspects into its business activities, including initial risk assessments, due diligence, and post-lease monitoring and evaluation following domestic laws and regulations and the bank's internal policies and guidelines, which include E&S aspects. Bogd Bank does not have an environmental and social management system (ESMS) in place but refers to its Gender Equality, Environmental and Social Responsibility Policy, which serves as its ESG Policy. Although the bank does not have dedicated E&S officers to investigate E&S issues, its credit specialists and risk management specialists are involved from processing to monitoring and supervising approved loan transactions.
    Involuntary Resettlement
    The project is not anticipated to entail in any involuntary resettlement impacts. Bogd Bank will develop an ESMS aligned with ADB's Safeguard Policy Statement (2009), and will include the ADB's prohibited investment activities list, grievance management, and exclude sub-loans and activities with involuntary resettlement impacts from ADB financing.
    Indigenous Peoples
    Bogd Bank will develop an ESMS aligned with ADB's Safeguard Policy Statement (2009), and will include the ADB's prohibited investment activities list, grievance management, and exclude sub-loans and activities with Indigenous Peoples impacts from ADB financing.
    Stakeholder Communication, Participation, and Consultation
    Stakeholder engagement activities were conducted, including the management of grievances, for internal and external stakeholders, including their status for the reporting period.

    Contact

    Responsible ADB Officer
    Huang, Biao
    Responsible ADB Division
    Private Sector Financial Institutions Division
    Responsible ADB Department
    Private Sector Operations Department

    Timetable for assistance design, processing, and implementation

    Concept Clearance
    -
    Credit Committee Meeting
    -
    Approval
    20 Feb 2024
    Last PDS Update
    20 Feb 2024

    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.

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    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.

    None currently available.


    Evaluation Documents See also: Independent Evaluation

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    Related Publications

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