Mongolia's best bank for SMEs 2019: TransBank
Since October 2016, Otgonbayar Munkhtogoo, chief executive of TransBank, has cut an aggressive figure in Ulaanbaatar financial circles.
Yet as he and his management seek to move up the rankings from seventh biggest by equity, the plan is to think small.
TransBank is positioning itself as the bank of choice for the small to medium-sized enterprises Mongolia needs to nurture if it is going to evolve beyond an over-reliance on commodities.
Between October 2018 and September 2019, TransBank issued 56 SME loans of notable size to 42 borrowers. The total amount (of a mere $73 million) won’t sound like much to global bankers, but there is scope for growth.
The biggest area of focus over the last year has been trade, at more than 28% of the SME portfolio.
After that, in descending order, mining, consumer services, transport, construction, hotels, management services and electricity.
In the year ahead, Otgonbayar wants SMEs to account for 80% of the bank’s total loan portfolio. As of the third quarter of 2019, SMEs accounted for 44% of all loans.
The reason TransBank walks away with this year’s award is because of where that portfolio is aimed: at female entrepreneurs and sustainable businesses. From October 2018 to September 2019, the bank provided 31.7% of all large loans to female-run businesses – 17 in total.
TransBank is responding to global research showing that nations and companies that best cultivate and utilize female talent are the most innovative, productive and inclusive. What better way to bolster bank profits than by supporting the diversification of the economy’s growth engines?
The same goes for making a real contribution to Ulaanbaatar’s need to improve air quality. So far, just 7% of TransBank’s overall SME portfolio is dedicated to entrepreneurs providing sustainable solutions. That’s going to change markedly in 2020, Otgonbayar says. Talk about cleaning up.