92% of SME loans distributed nationwide
Problems with collateral were reported to have affected the disbursement of MNT30 billion as loans to small and medium enterprises in all 21 provinces and six districts of Ulaanbaatar, particularly in the countryside. D.Batmagnai, officer in charge of Finance and Investment of SME, answers questions on the matter.
How much loan has been given so far?
The target has been met 99 percent in Ulaanbaatar and 95 percent in the provinces. The national figure is 92 percent. Loans are being given through Khan Bank, XasBank and Savings Banks in the countryside and through Capitron Bank, Golomt Bank and Ulaanbaatar Bank in Ulaanbaatar.
There were complaints that people in regions without banks were not able to get the loans. What finally happened?
Khan Bank has branches in every soum in all 21 provinces, and Savings Bank and XasBank may not have branches in some soums, but they do have branches in all provincial centers. The main problem was with collateral. The people in the countryside do not have enough assets to offer as security. The banks evaluate assets at market rates. The most promising projects are selected. Applicants are not always happy with the banks’ decisions.
How many loan applications are received per year?
The Government spent MNT1 billion to encourage SMEs in 2008. This works out to, only about MNT60-70 million per province. In 2009 and 2010, when MNT 30 billion was budgeted nationwide, one province got about MNT700 million. But even this is not enough. Organizations and individuals submit about 6,000 proposals and only about 10 percent of them are issued these special loans.
Will projects rejected this year be reconsidered next year?
It is possible. Many viable proposals could not be approved for a loan. Some of them may get financial help from foreign projects. Most of the proposals are about manufacturing and refining raw materials.
How much loan has been given so far?
The target has been met 99 percent in Ulaanbaatar and 95 percent in the provinces. The national figure is 92 percent. Loans are being given through Khan Bank, XasBank and Savings Banks in the countryside and through Capitron Bank, Golomt Bank and Ulaanbaatar Bank in Ulaanbaatar.
There were complaints that people in regions without banks were not able to get the loans. What finally happened?
Khan Bank has branches in every soum in all 21 provinces, and Savings Bank and XasBank may not have branches in some soums, but they do have branches in all provincial centers. The main problem was with collateral. The people in the countryside do not have enough assets to offer as security. The banks evaluate assets at market rates. The most promising projects are selected. Applicants are not always happy with the banks’ decisions.
How many loan applications are received per year?
The Government spent MNT1 billion to encourage SMEs in 2008. This works out to, only about MNT60-70 million per province. In 2009 and 2010, when MNT 30 billion was budgeted nationwide, one province got about MNT700 million. But even this is not enough. Organizations and individuals submit about 6,000 proposals and only about 10 percent of them are issued these special loans.
Will projects rejected this year be reconsidered next year?
It is possible. Many viable proposals could not be approved for a loan. Some of them may get financial help from foreign projects. Most of the proposals are about manufacturing and refining raw materials.
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