IFC Honored for Supporting Mongolia's Financial Sector
IFC’s resident representative in Mongolia, Tuyen D. Nguyen, received the “2015 Great Contribution to Mongolia’s Financial Sector Development Award” from the Mongolian Bankers Association in December. This annual award honors significant contributions of individuals or organizations to Mongolia’s financial sector development.
“This is really an IFC team award,” said Nguyen, acknowledging the input of many IFC teams that have worked to improve Mongolia’s financial sector for more than a decade. “IFC’s long-term efforts—from financing and building capacity for banks, to promoting financial sector reforms—have had a real impact in attracting and sustaining investments, and ultimately boost access to finance, which critical for Mongolia’s long-term growth,” said Nguyen.
With a population of only 3 million, Mongolia is at the threshold of a major transformation driven by the exploitation of its vast mineral resources. Although being the most sparsely populated country in the world, Mongolia has achieved very high levels of banking penetration and access of finance. To fully realize its economic potential, Mongolia needs to continue to strengthen its financial system—making it more diversified, efficient, stable, and capable of intermediating from large scale corporates and projects to the smallest of households and micro, small, and medium enterprises.
Beginning in 2002 with a $400,000 investment to a Mongolian microfinancing institution, IFC has actively invested in Mongolian financial institutions, particularly banks, to support the sector development and broaden access to finance, particularly to small companies. Today, IFC’s total investment in the country’s financial sector stands at $243 million, including $131 million directly mobilized from other international banks and investors.
IFC also actively supports financial sector reforms in the country, by promoting international corporate governance and environmental and social standards, as well as helping build critical financial infrastructure.
Mongolia became one of 10 emerging markets to introduce guidelines for sustainable finance, which is increasingly recognized as crucial to protecting financial institutions from risk as well as opening up new business opportunities such as green energy, clean technologies, and socially inclusive business models.
In addition, IFC is playing a key role in Mongolia’s secured-transaction reform; IFC is supporting the development and implementation of the regulatory framework, registry infrastructure, and market awareness to enable new lending based on collateralizing movable assets. As experienced in many other countries, this reform is expected to significantly open up new financing, especially for small and medium companies, households, and agricultural borrowers.
Published in February 2016
