MANILA, July 1 (Xinhua) -- The Asian Development Bank (ADB) said Tuesday that it had approved a loan of 40 million U.S. dollars to help Mongolia's small businesses get better access to financing from one of its biggest banks.
ADB said in a statement that the loan will be used to expand the micro, small- and medium-sized enterprises (MSME) portfolio of Khan Bank to 35 percent of its total loans by 2020, from 26 percent last year.
"Access to credit remains one of the most critical obstacles to the development of MSME sector in Mongolia. ADB will help address this gap by making available at Khan Bank more loans and longer repayment terms," said ADB Investment Specialist Monisha Hermans.
The Manila-based lender said MSMEs comprise 98 percent of all enterprises in Mongolia, with three quarters of them considered as microenterprises.
ADB said only 10 percent of Mongolia's small businesses regularly access financing through banks, as many banks are focusing their operations on top-tier and larger companies which are perceived to be less risky.
Khan Bank is the second Mongolian bank to receive a loan for MSME relending from ADB. In December 2013, ADB extended a loan of 30 million U.S. dollars to XacBank for relending to small businesses.