ADB and Bogd Bank JSC partner to boost financing opportunities for MSMEs in Mongolia

The financing initiative places a strong emphasis on supporting women-led MSMEs and advancing green finance initiatives.

The Asian Development Bank (ADB) and Bogd Bank JSC have inked a $15 million loan agreement aimed at bolstering financing opportunities for micro, small, and medium-sized enterprises (MSMEs) in Mongolia. The financing initiative places a strong emphasis on supporting women-led MSMEs and advancing green finance initiatives.

Under the financing package, ADB contributes $14 million, with half allocated specifically for MSMEs owned or led by women. An additional $1 million comes from the Canadian Climate Fund for the Private Sector in Asia II (CFPS II), administered by ADB. This concessional loan from CFPS II will be blended with ADB's funding to support climate finance projects within MSMEs, including investments in energy-efficient equipment and small-scale renewable energy installations.

Suzanne Gaboury, ADB Director General for Private Sector Operations, highlighted the importance of bridging Mongolia's capital market gaps by providing long-term financing to local lenders. This approach aims to reduce borrowing costs for MSMEs and facilitate the introduction of new green finance products tailored to underserved segments of the market.

MSMEs constitute a cornerstone of Mongolia’s economy, contributing significantly to job creation and accounting for a substantial portion of registered businesses. Despite their economic importance, access to credit remains a critical hurdle, with MSMEs receiving less than one-third of total outstanding bank loans as of 2023. Women entrepreneurs in Mongolia face additional challenges, including lower approval rates for loans despite comprising nearly half of the workforce and demonstrating higher repayment rates.

Bogd Bank JSC, established in 2014 and now operating 16 branches nationwide, plays a pivotal role in fostering economic growth by providing financial support to nearly 12,500 borrowers across various sectors. Over half of Bogd Bank’s lending portfolio is dedicated to MSMEs, with an increasing focus on women-led enterprises in sectors such as trade, agriculture, and healthcare. In a significant milestone, Bogd Bank became the first publicly listed bank on the Mongolian Stock Exchange in 2021.

Saruul Ganbaatar, Chief Executive Officer of Bogd Bank, expressed enthusiasm about the partnership with ADB, emphasizing their shared commitment to empowering MSMEs and promoting sustainable economic development in Mongolia. The collaboration is poised to pave the way for expanded access to finance and innovative green finance solutions, driving growth and resilience within Mongolia’s business community.

For more information on ADB’s initiatives and Bogd Bank’s impact, visit their respective websites at www.adb.org and www.bogdbank.mn.