Commercial bank loans to remain difficult

Not all economic analysts are agreed that the 11% policy rate the Mongol Bank has left unchanged since last year will help control inflation, but the Bank has said it will retain the rate in 2011. This is despite the fact that a high policy rate means commercial banks charging more interest on loans to the private sector, thereby stalling economic growth.

The MNT30 billion that SMEs have been lent is much less than what the sector needs but the loans were for longer periods and carried lower interests than those from commercial banks. Banks, however, are unlikely to change their policy, no matter what businessmen demand.