XacBank, a Mongolia-based institution offering traditional banking and insurance services as well as microfinance, recently secured a loan of USD 30 million from the Asian Development Bank (ADB), a multilateral institution seeking to promote social and economic development on the continent. The loan proceeds are to be used to finance micro-, small and medium-sized enterprises (MSMEs) in Mongolia, particularly those that are owned by women, located outside the city of Ulaanbaatar or both. This is the second loan ADB has issued to XacBank.
Tsevegjav Gumenjav, the CEO of Xacbank, said, “This funding will allow us to continue building on our strength and help to meet financing needs for local companies, thereby contributing to Mongolia’s economic development. Also, our strong commitment to servicing women-run MSMEs aligns well with the gender mainstreaming goals of ADB’s Strategy 2030.”
ADB Country Director Pavit Ramachandran said, “MSMEs are key drivers of employment in Mongolia, where there is also a need to diversify the economy away from natural resources. ADB is providing long-term stable financial support for XacBank, which will help it to mitigate funding risks and focus on expanding their MSME business, in turn enabling these businesses to create new jobs.”
XacBank offers microloans of up to MNT 30 million (USD 11,000) for terms of 3 to 36 months. As of 2019, XacBank reported total assets of MNT 3.3 trillion (USD 1.2 billion) and a gross loan portfolio of MNT 2 trillion (USD 730 million). TenGer Financial Group is the sole owner of XacBank. While the mining group Mongolyn Alt LLC is the top shareholder in TenGer, the majority of its stock is held by multilateral financial institutions, Japan’s Orix Corporation and the National Bank of Canada.
Established in 1966, ADB is an international development finance institution headquartered in Manila, the Philippines. The institution’s mission is to help its 68 member countries reduce poverty and otherwise improve the quality of life of Asia’s citizens. As of 2018, ADB has total assets of USD 192 billion, with a loan portfolio of USD 86.7 billion.
Additional Sources and Resources
Asian Development Bank press release
https://www.adb.org/news/adb-xacbank-sign-private-sector-loan-support-msmes-mongolia
Asian Development Bank homepage
https://www.adb.org/
Asian Development Bank 2018 annual report
https://www.adb.org/sites/default/files/institutional-document/496016/adb-annual-report-2018.pdf
XacBank homepage
https://www.xacbank.mn/
XacBank 2017 annual report
https://www.xacbank.mn/files/F32B9568-7953-453D-8DF7-D42FD85F94AA/XacBank%20Annual%20Report%202017.pdf
MICROCAPITAL BRIEF: Asian Development Bank (ADB) Loans $25m to Kashf Foundation to Expand Microfinance for Women in Pakistan
https://www.microcapital.org/microcapital-brief-asian-development-bank-adb-loans-25m-to-kashf-foundation-to-expand-microfinance-for-women-in-pakistan/
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