Small and medium business in Mongolia is getting a boost with help from the United States Government. On January 14, United States Agency for International Development, or USAID, Representative Chuck Howell, the Chief Executive Officer of Xac Bank Bold M. and Deputy CEO of Khan Bank Batsaikhan D. signed an agreement in Ulaanbaatar to support up to $25 million in lending to small and medium enterprises.
This USAID program under the U.S. Development Credit Authority is the first such program in Mongolia. By helping to increase the number of loans available to small and medium businesses, this program will help to save jobs and create more employment in Mongolia.
As a result of the economic crisis last year, bank credit in Mongolia and around the world tightened, lending decreased, and higher collateral resources were required from borrowers. The new agreement between USAID and Xac and Khan Banks will help to mobilize and leverage financing to small and medium business enterprises. The primary beneficiaries of this agreement are small businesses and the people who depend on them for jobs and services.
Targeted small businesses will include, but not be limited to, those working in the agriculture, construction and housing sectors, as well as start-ups associated with logistics and supply operations of the mining sector. This program will help to maintain and generate employment across these targeted sectors by promoting lower collateral requirements and longer term loans, and thus minimize the effects of the global financial crisis on the Mongolian economy.
Approximately ninety percent of businesses in Mongolia are small and medium enterprises, and as a result of the economic crisis these businesses have been unable to access needed finance. More than three-hundred thousand people are employed by small and medium enterprises in key sectors of the economy.
The United States is committed to working with its partner Mongolia to help the people of Mongolia and the region realize their full economic potential.