The London-based European Bank for Reconstruction and Development (EBRD) is considering disbursing a local-currency loan equivalent to USD 5 million to XacBank, a lender to micro-, small and medium-sized businesses in Mongolia. If approved, the loan is expected to be used for on-lending to “private micro, small and medium enterprises in Mongolia”[1]. EBRD also is studying the possibility of disbursing a local-currency loan equivalent to USD 10 million to XacBank under EBRD’s Mongolian Sustainable Energy Financing Facility. If the loan is approved, EBRD will also aim to assist XacBank with capacity building regarding financing projects such as energy conservation. If funding can be secured, the EBRD loan would be supplemented with technical cooperation to “support the identification of sustainable energy projects”[2].
As of 2012, XacBank reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 782 million, a gross loan portfolio of USD 462 million, approximately 71,200 borrowers, total deposits of USD 316 million and approximately 397,000 depositors.
EBRD provides loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs) in Eastern Europe, Central Asia and North Africa. In 2013, EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects across 34 countries.
By Alíz Crowley, Research Associate
About XacBank XacBank is a community development bank and microfinance institution (MFI) founded in 1998 that aims to grow into a commercial financial institution “by providing inclusive and value adding financial services to the citizens and expatriates, institutions and enterprises of Mongolia, while maintaining its leadership in the global microfinance industry.” XacBank is a subsidiary of TenGer Financial Group, a regional family of companies that also include XacLeasing, XacSecurity, TenGer Solutions and TenGer Insurance. As of 2014, XacBank has 92 branches and service outlets in Mongolia. As of 2012, XacBank reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 782 million, a gross loan portfolio of USD 462 million, approximately 71,200 borrowers, total deposits of USD 316 million and approximately 397,000 depositors. As of 2011, XacBank reported return on assets of 1.53 percent and return on equity of 15.65 percent.
About European Bank for Reconstruction and Development (EBRD) The European Bank for Reconstruction and Development (EBRD) is a multilateral institution headquartered in London, England. The bank began operations in 1991 upon the agreement of 40 countries, and it is owned by 64 countries as well as the European Investment Bank and the European Union as of 2014. It aims to finance operations that are both commercially viable and assist development in Eastern Europe, Central Asia and North Africa. It does this by providing loans, debt securities, equity investments, guarantees and technical assistance to micro- and small businesses via commercial banks and non-bank microfinance institutions (MFIs). In 2013, EBRD invested EUR 8.5 billion (USD 11.4 billion) in 392 projects across 34 countries.
Sources and Additional Resources
[1] EBRD, June 2014, XacBank MSME Loan
[2] EBRD, June 2014, MONSEFF – XacBank Sustainable Energy Loan
MicroCapital, June 4, 2014, European Bank for Reconstruction and Development (EBRD) Likely to Loan Azeri DemirBank $50m for On-lending to Micro-, Small, Medium-Sized Enterprises (MSMEs); $5m to Promote Residential, Business Energy Efficiency
MicroCapital, August 7, 2009, Mongolia’s XacBank and Horus Noomadic Solutions Announce Launch of Mobile Banking Services for Microfinance
MicroCapital, August 6, 2008, Mongolian Microfinance Institution XacBank Launches Cellphone Banking Service with Support from CGAP
MicroCapital Universe Profile: XacBank
MicroCapital Universe Profile: European Bank for Reconstruction and Development (EBRD)
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