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IFC’s $5 Million Loan to XacBank to Help Mongolian Enterprises, Stimulate Economic Growth


In Ulaanbaatar:
Tsolmon Baasanjav

Phone: +976 11 312-694

E-mail: tbaasanjav@ifc.org

In Beijing:

Wenqin Zhu

Phone: +86 10 5860-3130

E-mail:
wzhu@ifc.org

In Washington, D.C.:

Julie Ziegler
Phone:  (202) 473-0128

E-mail:
JZiegler1@ifc.org


Ulaanbaatar, Mongolia, July 8, 2010—IFC, a member of the World Bank Group, will provide an eight-year subordinated loan  of $5 million ( or 6.86 billion Mongolian togrogs) to XacBank LLC to help strengthen its capital position, boost lending to small and medium enterprises, and stimulate economic growth in Mongolia.

IFC’s loan, qualifying as tier-II capital under the Central Bank of Mongolia regulations, will help XacBank extend access to finance to more than 3,000 Mongolian small and midsize businesses, supporting job creation and the country’s economic recovery.


IFC’s commitment comes at a time of continued economic and financial uncertainly in Mongolia.  The country has been in turmoil since late 2008, when the economy suffered a severe blow as a result of falling global commodity demand and prices.  Shortly afterward, the country’s banking sector came under stress as construction projects stalled and herders failed make loan repayments.  One of the government of Mongolia’s mandates is to ensure the stability of the country’s financial sector and to help banks formulate plans to increase their capital reserves.  


Bold Magvan, Chief Executive Officer of XacBank, said, “This long-term financing provided by IFC is a vote of confidence in XacBank’s sustainability, development, operational success, and also represents a growing affiliation between the two organizations.”


Hyun-Chan Cho, IFC Country Manager for China and Mongolia, said, “Mongolia is an important country for IFC and we are expanding our program both in investment and advisory services.  XacBank has been a long-term strategic partner for IFC in Mongolia, and we are very pleased to see the bank’s continued sustainable growth and increased commitment to extend access to finance to small and midsize businesses.”


XacBank is a leading Mongolian microfinance bank with over 84,000 active borrowers.  XacBank has been an IFC client since 2002.  IFC’s total outstanding exposure to TenGer Financial Group, XacBank’s parent, is $12.4 million following the transaction.      


About IFC

IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing capital for private enterprise, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit
www.ifc.org.

About XacBank

Founded in 1998, XacBank is a community development bank and microfinance institution in Mongolia, and is headquartered in Ulaanbaatar. XacBank is one of the major banks in the country that provides its clients diversified financial services, innovative products, and premium hospitality through its network of over 80 branches spread across the nation. As of 30 June 2010, the bank had total assets of 352 billion Mongolian togrogs, whereas its loan portfolio reached 261 billion togrogs. For more information, visit
www.xacbank.mn.