MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Considers $25m Loan to Mongolia’s Khan Bank for Micro-, Small, Medium-Sized Enterprises (MSMEs)

The European Bank for Reconstruction and Development (EBRD), a UK-based development finance institution, is reviewing a proposal to invest USD 25 million in Khan Bank, a Mongolian institution, to provide funding for micro-, small and medium-sized enterprises (MSMEs) in Mongolia. Khan Bank classifies 51 to 60 percent of its operations as microfinance. The EBRD board of directors will consider the proposal in July 2013. [1]

For the year 2012, Khan Bank reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 2 billion, a gross loan portfolio of USD 1.2 billion, deposits of USD 1.5 billion, return on assets (ROA) of 3 percent, return on equity (ROE) of 30.3 percent, 300,000 active borrowers and 1.9 million depositors. Khan Bank classifies 51 to 60 percent of its operations as microfinance. In 2012, EBRD invested EUR 8.7 billion (USD 11.4 billion) in 34 countries.

By Meghan Gillis, Research Associate

About Khan Bank

Established in 1991, Khan Bank is a Mongolian provider of microfinance and traditional banking services through 512 branches in the country. For the year 2012, Khan Bank reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 2 billion, a gross loan portfolio of USD 1.2 billion, deposits of USD 1.5 billion, return on assets (ROA) of 3 percent, return on equity (ROE) of 30.3 percent, 300,000 active borrowers and 1.9 million depositors. Khan Bank classifies 51 to 60 percent of its operations as microfinance.

About European Bank for Reconstruction and Development

The European Bank for Reconstruction and Development (EBRD) is a multilateral institution headquartered in London. The bank began operations in 1991 upon the agreement of 40 countries and is now owned by 61 countries as well as the European Investment Bank and the European Union. It aims to finance operations that are both commercially viable and assist development in 29 countries in Eastern Europe, Central Asia and North Africa. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). In 2012, EBRD invested EUR 8.7 billion (USD 11.4 billion) in 34 countries.

Sources and Additional Resources

[1] European Bank for Reconstruction and Development Story: “Khan Bank MSME + VCF Facility,”http://www.ebrd.com/pages/project/psd/2013/39653.shtml

MicroCapital story, May 13, 2013, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD), European Union Commit $25m to Kyrgyz Sustainable Energy Financing Facility (KyrSEFF),” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-european-union-commit-25m-to-kyrgyz-sustainable-energy-financing-facility-kyrseff

MicroCapital story, March 8, 2013, “MICROCAPITAL BRIEF: EBRD Plans $200m to Expand Turkish Sustainable Energy Finance Facility (TurSEFF) for Small and Medium-sized Enterprises, Private Households,” https://www.microcapital.org/microcapital-brief-ebrd-plans-200m-to-expand-turkish-sustainable-energy-finance-facility-turseff-for-small-and-medium-sized-enterprises-private-households/

MicroCapital story, November 14, 2012, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Lends $70m to Garanti Bank of Turkey, Hipotekarna Banka of Montenegro, Bai Tushum of Kyrgyz Republic,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-lends-70m-to-garanti-bank-of-turkey-hipotekarna-banka-of-montenegro-bai-tushum-of-kyrgyz-republic-2/

MicroCapital story, August 6, 2012, “MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Extends Credit Line to Turkey’s Vakiflar Bankasi (Vakifbank) Worth $25m,” https://www.microcapital.org/microcapital-brief-european-bank-for-reconstruction-and-development-ebrd-extends-credit-line-to-turkeys-vakiflar-bankasi-vakifbank-worth-25m/

MicroCapital Universe Profile: European Bank for Reconstruction and Development (EBRD)

http://microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+%28EBRD%29

MicroCapital Universe Profile: Khan Bank

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Khan+Bank

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