EBRD provides US$ 1 million equivalent in tugrug for the benefit of micro and small businesses
Author(s): Svitlana Pyrkalo Date: 02 September 2013
The EBRD is supporting micro and small businesses in Mongolia with a loan to a microfinance institution, TransCapital. The loan of US$ 1 million equivalent will be provided in the local currency, Mongolian tugrug.
Signing the deal in the capital Ulaanbaatar during his first visit to the country, EBRD President Sir Suma Chakrabarti said: “Strengthening small businesses by improving their access to finance is one of our priorities in Mongolia, and we have already provided over US$ 107 million of financing for MSMEs directly and through credit lines to local banks. But this is our first cooperation with a non-bank financial institution dealing with microfinance in Mongolia. TransCapital’s network will allow EBRD financing to reach micro-enterprises around the country – some of which, we hope, will grow into small and medium-sized companies.”
TransCapital CEO, Altanzul Zorigt, said: “As an emerging economy, Mongolia has numerous MSE customers that are still un-served or underserved by banks and larger non-banking financial institutions. We plan to expand our market outreach to micro and small business owners across both urban and remote areas of Mongolia, providing more opportunities for their financial needs.”
Importantly, the loan will be denominated in local currency allowing entrepreneurs which sell their goods and services in local currency to avoid foreign exchange rate risk.
The loan, which comes under the EBRD Early Transition Countries Initiative*, will be complemented by a technical cooperation programme for training, advising and assisting TransCapital’s management and staff in relevant financial areas.
The EBRD has invested about US$ 1 billion in about 60 projects in Mongolia since 2006.
* The EBRD’s Early Transition Countries Initiative aims to stimulate economic activity in the Bank’s countries which still face the most significant transition challenges: Armenia, Azerbaijan, Belarus, Georgia, Moldova, Mongolia, Kyrgyz Republic, Tajikistan and Turkmenistan.
Last updated 2 September 2013
Svitlana PyrkaloLondon – Tel: +44 20 7338 6002