MICROCAPITAL BRIEF: European Bank for Reconstruction and Development (EBRD) Loans $8m to Mongolia’s Khan Bank for On-Lending to Support Value Chains That Include Micro-, Small, Medium-Sized Enterprises (MSMEs)

The European Bank for Reconstruction and Development (EBRD), a UK-based multilateral institution, reportedly has issued a loan of MNT 15 billion (USD 8 million) to Khan Bank, a commercial bank based in Mongolia, as the final tranche of a total of MNT 47 billion (USD 25 million) to be on-lent by Khan Bank to suppliers of micro-, small and medium enterprises (MSMEs) in Mongolia. 

The existing agreement between EBRD and Khan Bank is a “US 25 million framework dedicated to value chain finance . . . that allows the suppliers and distributors of MSMEs with links to big corporations to obtain more competitive financing.”

As of 2013, EBRD has total assets of EUR 26.4 billion (USD 35.4 billion), a gross loan portfolio of EUR 9.1 billion (USD 12.2 billion), return on assets (ROA) of 4.7 percent. As of 2013, Khan Bank has total assets of MNT 4.8 trillion (USD 160 billion), a gross loan portfolio of MNT 2.5 trillion (USD 83 billion) and deposits of MNT 2.8 trillion (USD 93 billion) and 1.8 million customers.

By Sarah Luo, Research Associate

About European Bank for Reconstruction and Development (EBRD)

The European Bank for Reconstruction and Development (EBRD) is a multilateral institution headquartered in London, England. The bank began operations in 1991 upon the agreement of 40 countries, and it is owned by 64 countries as well as the European Investment Bank and the European Union as of 2014. It aims to finance operations that are both commercially viable and assist development 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). As of 2013, EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects across 34 countries, has total assets of EUR 26.4 billion (USD 35.4 billion), a gross loan portfolio of EUR 9.1 billion (USD 12.2 billion), return on assets (ROA) of 4.7 percent.

About Khan Bank

Established in 1991, Khan Bank is a Mongolian provider of microfinance and traditional banking services through 512 branches in the country. As of 2013, Khan Bank has total assets of MNT 4.8 trillion (USD 160 billion), a gross loan portfolio of MNT 2.5 trillion (USD 83 billion) and deposits of MNT 2.8 trillion (USD 93 billion) and 1.8 million customers.

Sources and Additional Resources

European Bank for Reconstruction and Development (EBRD): EBRD extends US$8 million equivalent in Tugrik to Khan Bank for MSMEs

MicroCapital July 24, 2014: European Bank for Reconstruction and Development (EBRD) Promoting External Advice for Small and Medium-Sized Enterprises (SMEs) in Kyrgyzstan

MicroCapital, July 2, 2014: European Bank for Reconstruction and Development (EBRD) Likely to Loan Mongolian XacBank $5m for On-lending to Micro?, Small, Medium-Sized Enterprises (MSMEs); $10m for Sustainable Energy

MicroCapital, July 20, 2013:  European Bank for Reconstruction and Development (EBRD) Loans Kyrgyz Investment and Credit Bank (KICB) $5m; Demir Kyrgyz International Bank (DKIB) $4m for On-lending to Fund Energy Efficiency Improvement Projects

MicroCapital, June 21, 2013: European Bank for Reconstruction and Development (EBRD) Considers $25m Loan to Mongolia’s Khan Bank for Micro-, Small, Medium-Sized Enterprises (MSMEs)

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

MicroCapital Universe Profile: Khan Bank

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