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SMEs locked out of financing due to fund scandal www.zgm.mn

An alarming scandal involving Small and Medium-sized Enterprise (SME) Development Fund was brought to light earlier this quarter. The fund, which was supposed to finance SMEs, has allegedly granted high sum of loans to high-profile officials. This resulted in arrests of four people including the Director of SME Development Fund Tugsbileg Sukhbaatar and his Deputy last month. Becoming victims to the bribery and embezzlement scandal, SMEs have lost access to fund financing as a source close to the matter informed that the fund currently has no officials that can authorize loans, completely freezing fund transactions.

The scandal took a toll on Ministry of Food, Agriculture and Light Industry (MFALI), which was responsible for monitoring the fund, and resulted in dismissal of its minister Batzorig Batjargal. Thus, the Independent Authority Against Corruption (IAAC) has begun an investigation on six Parliament members. Although the IAAC refused to disclose the names of those MPs, local media outlets suspect Batzorig Batjargal, Sodbaatar Yangug Bolorchuluun Khayngaa, Enkhbayar Jadamba, Uchral Nyam-Osor and Soltan Gombojav to have been involved in the case. Moreover, the recently appointed Minister of Road and Transport Development Sodbaatar Yangug held a press conference yesterday and disclosed his involvement with the fund scandal and submitted his resignation letter to the Prime Minister.

• SMEs have lost access to financing as the fund currently has no officials that can authorize loans.

• MNT 72.4 billion was allocated to SME Development Fund to finance 132 projects this year

• The situation will only be settled if the Parliament appoints the next Minister of Food, Agriculture and Light Industry.

However, in the middle of commotion in politics, SMEs are waiting for financing from the fund. This year, MNT 72.4 billion was allocated to the fund to finance 132 projects, out of which 80 percent were in local provinces. The average repayment rate of the fund stood positive at 93.5 percent according to Enkh-Amar Mijidsuren, Head of Policy and Planning Department of MFALI. He informed that an acting Chairman of the fund was appointed; however, the incoming minister needs to enforce his authority before any fund can be released. The situation will only be settled if the Parliament appoints the next Minister of Food, Agriculture and Light Industry.



Published Date:2018-12-04