2nd of September, 2013, Bank of Mongolia and European Bank of Reconstruction and Development have signed a memorandum on local currency loan to be provided by EBRD. The loan is dedicated for the countries that are in initial phase of transition. The interview with the Head of Financial Markets Loan Unit Zh.Bataa as follow.
It has been said that the investment made by EBRD will be increased by two-times. What is the amount of the current investment provided by the bank?
Since the EBRD commenced its operation in Mongolia in 2006, it has invested USD1 billion in over 60 projects. Therefore, by the program implementation the loan will be increased by two-times enabling the country to receive another billion dollars in investment.
The bank talked about providing local currency loans to the SMEs. What would be the result and the significance?
It will enable the borrowers to obtain relatively low cost loans. The shared risk by the contributors will make the low cost local currency loan possible. The targeted borrowers are those who provide goods and services by local currency which make them risk adverse if the loan is taken in foreign currency. We consider this a big step towards promoting national businesses.