IFC, a member of the World Bank Group, and FMO, the Netherlands development finance company, are providing continued support to the financial sector in Mongolia with much-needed long-term capital that expands financing to local micro, small, and medium-sized enterprises (MSMEs).
As part of this effort, IFC has now provided a syndicated senior loan facility of $108.5 million to XacBank, the largest syndication for a Mongolian commercial bank to date. The facility comprises an IFC A loan of $15 million and an aggregate of $93.5 million of B and parallel loans from eight international financial institutions. Of this, $25 million is from FMO, which, together with IFC, acted as co-arranger for this transaction. About $30 million of the facility will be dedicated towards supporting women-owned or operated MSMEs.
“This syndicated financing to XacBank will significantly increase access to finance for local MSMEs and especially for women entrepreneurs,” said Tuyen D. Nguyen, IFC’s resident representative in Mongolia. “We will continue our cooperation with XaBank to further promote inclusive and sustainable growth in the country.”
“This financing demonstrates the confidence that IFC and other global co-lenders have in XacBank and sends a positive signal to the market,” said Amartuvshin Hanibal, President of XacBank. “We believe this funding will have a great impact on local companies, jobs, and economic development.”
“We are glad to enter into this new partnership with XacBank, a key strategic partner in Mongolia,” said FMO’s chief investement officer, Ms. Linda Broekhuizen. “We are delighted to support XacBank to expand access to finance for local MSMEs, which are key to the country’s economic and social development.”
IFC and FMO have been partners with XacBank for over a decade. Their familiarity with the Bank, deep knowledge of the Mongolian banking sector, and global networks have played a key role in mobilizing this facility. The participation of eight global investors in this syndicated loan demonstrates strong confidence in Mongolia’s banking sector and outlook for the country’s sustained economic recovery.
In addition to the $40 million provided by IFC and FMO, participants include the Women Entrepreneurs’ Debt Fund ($15 million), Finnfund ($10 million), IIB ($10 million), Swedfund ($10 million), SIFEM ($8 million), Oikocredit ($8 million) and AfrAsia Bank ($7.5 million). The ACTIAM FMO SME Finance Fund provided $5 million.
About FMO
FMO (the Netherlands Development Finance Company) is the Dutch development bank. FMO supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. FMO believes a strong private sector leads to economic and social development, empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With an investment portfolio of EUR 9.3 billion, FMO is one of the largest European bilateral private sector development banks. www.fmo.nl
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with more than 2,000 businesses worldwide, we use our capital, expertise, and influence to create opportunity where it’s needed most. In FY15, our long-term investments in developing countries rose to nearly $18 billion, helping the private sector play an essential role in the global effort to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org
About XacBank
XacBank is one of the major banks in the country that provides its clients diversified financial services, innovative products, and premium hospitality through its network of over 86 branches across the nation. Since its inception, the Bank significantly contributed to attract foreign investment in Mongolia by obtaining a little over USD1 billion in the form of loan from 30 different organizations in order to support Mongolian micro, small and medium enterprises, to deliver comprehensive and inclusive financial services for the long term. www.xacbank.mn
