The European Bank for Reconstruction and Development (EBRD) has set up a US$50mn financial sector framework for Mongolia. Under the terms of the new strategy, the EBRD will extend financing to local commercial bank, leasing, insurance and consumer finance institutions, pension companies and non-bank micro finance institutions.

This framework is supported by an additional US$9mn in technical cooperation funds to encourage the development of the local banking sector.

A private Mongolian bank known as Khan Bank is set to receive a US$10mn loan that it will on-lend to micro, small and medium-sized companies.

Khan Bank will also receive a US$1mn from the EBRD to support the bank’s trade finance activities. The bank has the largest branch network in Mongolia and has particular strength in rural finance.