FMO, the Dutch entrepreneurial development bank, announced today that it has arranged a USD 120 mln syndicated facility to Khan Bank, Mongolia’s leading universal bank and a customer of FMO since 2009. Following FMO and participating in the syndicated transaction are Proparco, France’s development finance institution (DFI); DEG, Germany’s DFI, IIB (International Investment Bank), and Atlantic Forfaitierungs AG.
FMO’s senior loan of ~USD 60 mln will contribute to the bank’s funding stability. The facility, which will be split into two tranches of a 5- and 7-year tenor, will help grow Khan Bank’s SME portfolio, while also significantly contributing to financing the green portfolio of Khan Bank’s end users, further solidifying Khan Bank’s position as a lead SME and retail bank in the country. FMO’s latest round of financing once again renews its long-term commitment to the Mongolian market.
As Mongolia’s largest commercial bank, which is celebrating its 30th anniversary this year, Khan Bank is also a digital bank leader in the Mongolian financial space. With nearly 550 branches across the country, Khan Bank provides comprehensive banking and access to finance services to individuals, small and medium-sized enterprises (SMEs) and corporate customers across almost all of both urban and remote Mongolia, reaching ~80% of all households.
Green lending in Mongolia is still in its earlier stages; currently, Khan Bank’s green portfolio is primarily donor-funded, and the bank has ambitions to further grow its green portfolio throughout the country. Last year, Khan Bank launched its own green loan product to further bolster its green portfolio, but there remain certain barriers such as insufficient information and awareness and lack of capacity building, which will be mitigated through the financial support provided.
Marnix Monsfort, Director Financial Institutions at FMO, said: “We’re honored to once again extend our support to our trusted, long-term partner Khan Bank. With a clear focus on providing financial inclusion to even the most remote and marginalized parts of Mongolia, combined with a growing emphasis on green finance, Khan Bank is a clear case of our working together to reduce inequalities on a large scale.”
Guillaume Barberousse, Director Financial Institutions at Proparco, added: “Proparco is proud to team up with other financial institutions under FMO’s leadership to support Khan Bank’s commitment to SMEs. Khan Bank has greatly contributed to financial inclusion in Mongolia and the growth of its green projects portfolio consolidates its position as a key partner for development.”
Martin Fankhauser, CEO and Dieter von Boddien, Deputy CEO of Atlantic Forfaitierungs AG, said: “Being engaged in Mongolia in the field of trade and import finance for around 20 years, we are very pleased to support our long-term partner Khan Bank in the transformation process towards a sustainable and green economy whilst reducing carbon footprint through the impact of this finance facility. We also greatly appreciate to continue our successful partnership with FMO, thereby strengthening small and medium enterprises in Mongolia, as previously achieved in other regions of the world.”
Georgy Potapov, Deputy Chairperson of the IIB Management Board, commented: “This transaction is a vivid example of what partnership is all about. A group of development institutions providing support for one of our long-standing esteemed clients that, in its turn, continuously contributes to the sustainable development of Mongolian economy and its priority SME sector. The facility fully complies with our mission and mandate of a multilateral development institution and we are happy to be a part of it”.
Petra Kotte, Senior Director Financial Institutions and German Business at DEG said: “DEG is delighted to continue the cooperation with our valued long-term partner Khan Bank. And we are proud to join forces with our partner institutions to create a strong positive development impact by supporting local SMEs as well as green finance in Mongolia.”
Munkhtuya Rentsenbat, CEO of Khan Bank added: “I am honored to express my gratitude, on behalf of Khan Bank and our Board of Directors, to all the participants to this ground-breaking syndication for their confidence in our bank and its future development. This financing is critical to support our SME business clients, preserve jobs, and strengthen their resilience for successful post COVID-19 recovery, all with the aim of contributing to building an inclusive and green economy. I’m pleased to strengthen our long-standing cooperation with FMO, Atlantic Forfaitierungs, DEG, and IIB, and for establishing a new, lasting relationship with Proparco.
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For more information, journalists are welcome to contact:
International Banking Department
Atlantic Forfaitierungs AG
Dieter von Boddien
International Investment Bank
Head of International Relations and Communications
About Khan Bank
Khan Bank operates throughout Mongolia with 536 branches and employees over 5,000 in the capital city of Ulaanbaatar and rural areas. Through this extensive network, the Bank provides comprehensive banking services to 2.4 million customers (75% of total population) 2 million card owners (65% of total population) and 53,000 SME and corporate customers. Khan Bank accesses the widest digital banking network with 142 Express Banking centers, 1,121 ATMs, 15,466 POS machines, and 12,000 merchant accounts throughout Mongolia.For more information about Khan Bank, please visit their website: www.khanbank.com
Proparco is the private sector financing arm of Agence Française de Développement Group (AFD Group). It has been promoting sustainable economic, social and environmental development for over 40 years. Proparco provides funding and support to both businesses and financial institutions in Africa, Asia, Latin America and the Middle-East. Its action focuses on the key development sectors: infrastructure, mainly for renewable energies, agribusiness, financial institutions, health and education.
Its operations aim to strengthen the contribution of private players to the achievement of the Sustainable Development Goals (SDGs) adopted by the international community in 2015. To this end, Proparco finances companies whose activity contributes to creating jobs and decent incomes, providing essential goods and services and combating climate change. For a World in Common.
For further information: http://www.proparco.fr and @Proparco
For almost 60 years DEG has been a reliable partner to private-sector enterprises operating in developing and emerging-market countries. We provide our customers with tailor-made solutions, including financing, promotional programmes and advice tailored to individual needs. They can thus develop successfully and sustainably, while generating local added value and creating qualified jobs. With our portfolio of around EUR 8.5 billion in approximately 80 countries we’re one of the world’s largest private-sector development financiers. Learn more: www.deginvest.de
About Atlantic Forfaitierungs AG
Atlantic Forfaitierungs AG is domiciled in Zurich, Switzerland and belongs to the German Oetker Group, an international enterprise active in the food and beverage industry, banking and hotels. Since the late 1950s, Atlantic has been successfully engaged in export and trade finance and participation in syndicated loans, including facilities arranged by development banks such as FMO. Atlantic focuses primarily on financing for trade transactions in emerging and frontier markets, including Mongolia.
About International Investment Bank
International Investment Bank (IIB) is a multilateral development institution founded in 1970. Headquarters of the institution are situated in Budapest, Hungary. Current shareholders of the Bank include Bulgaria, Cuba, Czech Republic, Hungary, Mongolia, Romania, Russia, Slovakia and Vietnam. The Bank finances projects aimed at supporting the economic development of its member states and that would have a significant positive social, economic and environmental impact. The Bank offers direct financing and provides loans in partnership with other financial institutions as well as through partner banks.The Bank is rated A- (outlook stable) by S&P, A3 (outlook stable) by Moody’s, A- (outlook positive) by Fitch, A (outlook stable) by ACRA.