MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Loan $20m to Khan Bank of Mongolia to Support Small and Medium-Sized Businesses

International Finance Corporation (IFC), a member of the World Bank Group, recently announced it will loan USD 20 million to Khan Bank LLC of Mongolia to help strengthen its capital position and increase lending to small and medium-sized enterprises (SMEs). The seven-year subordinated loan will allow the bank to offer up to 14,000 new loans to SMEs through the end of 2015. Khan Bank reports that it serves about 80 percent of all Mongolian households and that most of its borrowers are women. 

Mr Hyun-Chan Cho, IFC’s Country Manager for China and Mongolia, said, “A strong banking system is essential to support the country’s economy and Khan Bank is becoming a role model for reform in Mongolia’s banking system.” He added, “IFC’s continued partnership with Khan Bank will help provide access to finance for SMEs to create more jobs and support Mongolia’s transition to a stable market economy.” For 2010, Khan Bank reported total assets of MNT 1.6 trillion (equivalent to USD 1.2 billion), a gross loan portfolio of MNT 777 billion (equivalent to USD 616 million), approximately 310,000 borrowers, return on assets (ROA) of 1.9 percent and return on equity (ROE) of 20.5 percent.

By Carol Kim, Research Associate

About International Finance Corporation (IFC): IFC is a member of the World Bank Group that offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2011, IFC has 182 member countries that drive its policies and approve disbursements. As of June 30, 2010, IFC reports net income of USD 1.75 billion, total assets of USD 61 billion, return on assets of 3.1 percent and total investment mobilization of USD 18.4 billion to 528 projects.

About Khan Bank: Established in 1991 in Mongolia and privatized by the State Property Committee in 2003, Khan Bank provides financial services to corporates, small and medium-sized businesses and individuals. For 2010, Khan Bank reported total assets of MNT 1.6 trillion (equivalent to USD 1.2 billion), a gross loan portfolio of MNT 777 billion (equivalent to USD 616 million), approximately 310,000 borrowers, return on assets (ROA) of 1.9 percent and return on equity (ROE) of 20.5 percent.

Sources and Additional Resources:

International Finance Corporation (IFC) Press Release: “IFC Helps Mongolian Bank Increase Capital and Lending to Small and Medium Business”, June 2011, http://www.ifc.org/ifcext/pressroom/ifcpressroom.nsf/PressRelease?openform&3AF90B30BD143AC6852578B00054A83B

MicroCapital.org: “MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Assist Microfinance Institution (MFI) IMON International of Tajikistan in Financing, Leasing Agricultural Equipment”, April 26, 2011, https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-to-assist-microfinance-institution-mfi-imon-international-of-tajikistan-in-financing-leasing-agricultural-equipment/

MicroCapital.org: “MICROCAPITAL BRIEF: Belgian Incofin Loans $1.5m to TenGer Financial Group of Mongolia”, February 11, 2011, https://www.microcapital.org/microcapital-brief-belgian-incofin-loans-1-5m-to-tenger-financial-group-of-mongolia-2/

MicroCapital’s Universe Profile: International Finance Corporation (IFC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

MicroCapital’s Universe Profile: Khan Bank, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Khan+Bank

Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/

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