Dutch Development Bank Arranges USD 120 million loan to Khan BankEconomy
Ulaanbaatar /MONTSAME/ The Dutch Development Bank FMO arranged a USD120 million loan to Khan Bank, Mongolia’s leading universal bank. This USD 120 million loan (equivalent to MNT 300 billion) is the largest loan in Khan Bank’s history and will strengthen its strategy to reach out to even the most remote areas of Mongolia. The financing signals FMO’s long-term commitment to the Mongolian market and is expected to pave the way for additional funding from other financial institutions.
Khan Bank is a robust institution with prudent management and a leader in digital banking. The loan will support Khan Bank’s successful growth and will expand access to financing for small and medium-sized enterprises.
Through its extensive network of 536 branches nationwide, Khan Bank provides banking services to an estimated 70% of Mongolian households. The bank provides comprehensive banking services and access to finance to individuals, small and medium-sized enterprises (SME) and corporate customers in even the most remote areas of the vast country. Khan Bank has been a client of FMO since 2009 and is an important partner in Mongolia.
The USD 120 million syndicated loan facility supports Khan Bank's ambition to remain the country’s leading SME and retail bank reaching out to most people in Mongolia. The term facility will also contribute to Khan Bank’s funding stability. In addition to the loan facility, capacity development support will be provided to further strengthen the bank’s environmental and social management system. The inclusiveness and developmental impact of the facility is good through the bank’s strong remote outreach, significant SME portfolio and the bank’s steps to further digitalize banking activities.
FMO commits USD 45 million and in addition mobilized funding from diverse international financing partners: The German development finance institution DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH commits USD 23 million. The International Investment Bank (IIB) commits USD 20 million, the Belgian Investment Company for Developing Countries (BIO) commits USD 17 million and the Development Bank of Austria (OeEB) commits USD 15 million.
John Bell, CEO of Khan Bank commented to the occasion, “With shrinking foreign investment in Mongolia due to an economic downturn in recent years, this syndicated loan facility of USD 120 million from leading international financial institutions is critical not only for Khan Bank’s customers, but also for the overall economy. It is a promising manifestation of increasing confidence of investors in Mongolia. Khan Bank is honored to be leading the way forward.”
Linda Broekhuizen, Chief Investment Officer of FMO commented: “We feel privileged to build further on our warm and longstanding relationship with Khan Bank. This facility will help ensure that more than 2.4 million people from every part of Mongolia can benefit from the country’s development”.