MICROCAPITAL BRIEF: ADB Issues Local-currency Bond in Mongolia to Finance Invescore Lending to Women-led MSMEs

The multilateral Asian Development Bank (ADB) recently issued a local-currency, three-year bond in Mongolia with a face value of MNT 13.7 billion (USD 4 million) and a coupon rate of 11.25 percent paid out semi-annually. The proceeds are to fund Invescore, a non-banking financial institution in Mongolia, to increase its lending to micro-, small and medium-sized enterprises (MSMEs), with a focus on those owned by women. This follows ADB’s approval earlier in the year of two senior, unsecured loans to Invescore each worth USD 5 million – with part of the total denominated in local currency – for the same purpose. In addition to boosting women’s enterprises, ADB intends its partnership with Invescore to promote “economic diversification through MSMEs working in non-extractive sectors (agriculture, wholesale trade, services, and manufacturing).”

Invescore was founded in 2016 and as of August 2023 has 17 branches in Mongolia plus subsidiaries operating in Kazakhstan, Kyrgyzstan and Uzbekistan. The institution offers a range of financial services to consumers and businesses, including loans, credit cards, payment guarantees and consulting services. It also offers the Pocket mobile app, which allows users to borrow and access an electronic wallet. For the year 2022, Invescore reported total assets of MNT 358 billion (USD 103 million); a gross loan portfolio of MNT 282 billion (USD 81 million) spanning 182,000 clients; one-year return on assets of 9.4 percent and return on equity of 27 percent. It is controlled by SIBJ Capital, a Mongolia-based entity involved in finance, real estate, technology and human resources.

Established in 1966, ADB is a development finance institution headquartered in the Philippines and owned by its 68 member nations. It offers financial and technical assistance intended to support economic development and reduce poverty in Asia and the Pacific. During 2022, ADB issued commitments of USD 20.5 billion, ending the year with total assets of USD 290 billion and generating one-year return on equity of 4.2 percent and return on earning assets of 1.1 percent. During 2022, ADB committed USD 197 million to projects in Mongolia.

By James Stevenson, Research Associate

Sources and Additional Resources

ADB press release
https://www.adb.org/news/adb-issues-mongolian-togrog-gender-bond

Invescore homepage
https://invescore.mn/

Invescore Consolidated Financial Statement, 2022
https://invescore.mn/media/report_file/A10-1.AR_INV_eng_IFRS_2022_grp_V3.pdf

Invescore First Half-Year Operational Report, June 2023
https://drive.google.com/file/d/1Y8FpHKz_zccwwn9Zsg20rx095IYSCbKc/view?pli=1

Pocket app homepage
https://www.pocket.mn/

Pocket app on the App Store
https://apps.apple.com/us/app/pocket-mn/id1486845825

Pocket app on Google Play
https://play.google.com/store/apps/details?id=mn.pocket.merchant

ADB Financial Report, 2022
https://www.adb.org/sites/default/files/institutional-document/872636/adb-financial-report-2022.pdf

ADB Annual Report, 2022
https://www.adb.org/sites/default/files/institutional-document/872636/adb-annual-report-2022.pdf

ADB homepage
https://www.adb.org/

Previous MicroCapital article on ADB
https://www.microcapital.org/microcapital-brief-adb-findev-canada-to-partner-on-investments-in-market-development-womens-empowerment-climate-change-adaptation-mitigation-in-asia-pacific/

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