March 26, 2013- IFC, a member of the World Bank Group, on Tuesday agreed to provide $20 million to Khan Bank LLC, Mongolia’s largest bank by assets, to increase lending to small and medium enterprises.
IFC’s five-year senior loan will help the bank make loans to 5,000 additional small and medium enterprises over the next five years. “IFC’s investment will support our efforts to satisfy increasing financing needs among a rapidly growing Mongolian economy,” said Khan Bank’s Chairman Mr. Hideo Sawada. “IFC adds value to our business, not only through its financing, but also through its global standing as a leading multilateral lender. Working with IFC boosts our ability to provide financial services to an increasing number of smaller businesses and improves confidence in the banking sector.”
Mongolia’s economy is undergoing a major transformation driven by its mining industry, but financing for smaller businesses remains critical for the Mongolian economy to make the most of these opportunities. By supporting smaller enterprises, IFC helps Mongolia’s economic diversification and job creation.
IFC is the third-largest shareholder in Khan Bank, owning a 9.3 percent stake and previously provided financing and advisory services to support the bank’s assessment of the small and medium enterprise customer market segment and to strengthen its capital position. Since becoming an IFC client in 2004, Khan Bank has grown to become the largest bank in Mongolia by assets and branch network, reaching about 80 percent of Mongolian households.