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AwardsBest Bank Awards

Mongolia's best bank for SMEs 2018: XacBank


Bold Magvan, CEO, XacBank.jpg
Bold Magvan, XacBank

Founded in 2001 and partly owned by the International Finance Corporation and the European Bank for Reconstruction and Development, XacBank has always been the go-to bank in Mongolia for small and medium-sized enterprises.

It remains the leader in its field, and a worthy winner of this award, banking just shy of 25% of all domestic SMEs via 86 branches dotted around the country.

Over the last 18 months, Xac, under chief executive Bold Magvan, has secured $169 million in fresh funding from the IFC and the US-led Overseas Private Investment Corporation, in part to support women-owned businesses. The bank has disbursed $17.4 million worth of loans to female entrepreneurs at low rates of interest. Two thirds of all small firms are owned and run by women, according to the central bank.

Another consistent focus is on supporting green businesses in a country whose big cities are often shrouded in winter by choking smog.

The bank held its inaugural Green Financing Forum in late 2017, and has secured $20 million from the South Korea-based Green Climate Fund to fund small firms that install and produce energy-efficient goods and technologies. In December 2017, XacBank signed a $40 million syndicated loan with the EBRD to support micro-sized SMEs, while continuing to work with Japan’s JICA to channel business development loans ranging from $10,000 to $40,000 to local corporates.

XacBank has its work cut out to remain ahead of the pack. Khan Bank aims to boost its share of the SME market from 17% in late 2017 to closer to 25% in 2019, while second-tier lender TransBank, under new and ambitious management, has its sights set on being a leader in SME lending too.