USD 500 million effective support to be provided for financial sector and SME access to finance
At the forum, Giannetto Giacomo, Project Officer for SCGS at the ADB, addressed “As you know, the economy is very concentrated in Mongolia. Because of that, there are a lot of volatility driven by; for instance, commodity prices. One objective of this project is to support SME finance in order to create diversification and job growth in non-mining sectors. When we did the initial assessment for potential outcome, we estimated that 15,000-16,000 new jobs will be created once the project completes. In terms of financing, the project itself has around USD 60 million in financing and because of the structure of the project, this allows exponential support. We estimate about USD 500 million of effective support to the financial sector and SME access to finance. Also, there are lots of unique and creative aspects to the project, such as risk sharing between banks and placement of time deposits in banks. This is innovative not only in Mongolia, but actually across all projects the ADB implemented in financial support. At the time when the project was approved, because of someone’s innovations and potential impact, it won an award from the ADB for the best financial sector project of 2017.” According to the CGF, MNT 32.8 billion guarantee was issued to MNT 58.1 billion loans of over 160 SMEs via “Mon 33 38” project within the frame of SCGS. 37 percent of the SMEs involved in the guarantee were manufacturers, while 35 percent were service providers and the remaining accounted for trade entities. Furthermore, the fund highlighted that around 1,180 workplaces have been created with the project so far