INTRODUCTION

CREDIT GUARANTEE

FUND OF MONGOLIA

ALTANKHUYAG.Sh

Executive Director

17.Oct.2014

1 10/17/2014

Legal framework generation

– 2004 Credit guarantee project under pilot program with 4 aid

organizations: GIZ – Germany, Mercy Corps, USAID – USA, Enterprise Mongolia – UNDP, ADRA (mostly portfolio guarantees).

– 2005 Credit Guarantee concept was first revealed to “The SME

support program” by the GM and to the “Law of SME” adopted

by the Parliament in 2007.

– 2012 Law of Credit Guarantee Fund was promulgated.

The law is applicable to the fund where the GM acts as a

founder, an initiator and a counter-guarantor. CGFM was

established in November.

– June 2013 First guarantee has been extended based on operational

procedures figured out.

2 10/17/2014

Operation framework generation

– 2012 and 2013 International donor organizations and other

countries meetings to support SMEs through effective

credit guarantee system held UNDP, JICA, USAID, GIZ, ADB and many others.

– 2013 Knowledge-sharing program under KDI (Korea). Effective learning from KODIT experiences and policy recommendations

Learning other institutions from Japan, Buriat Republic (Russia)

– Launching cooperation with such credit guarantee funds from

Malaysia, Korea, Taiwan and Moscow (Russia)

3 10/17/2014

Stabilization

Organizational structure Governing

Board

Credit Guarantee

Department

Credit Guarantee

Committee Auditing Board

Administration

Department

Executive Director

/Operational unit/

Research and

Training

Department

Local Representatives

10/17/2014 4

Stabilization (Circumstances)

– The Governing board is highest hierarchy of the Fund.

– Indirect guarantee scheme.

– Assessment is carried out by the Fund on banks’ conclusion.

– Coverage ratio is up to 60%, but not exceed ₮250 M* (~€106K),

leverage ratio - 20 times.

– Guarantee fee varies from 1 to 3% of guaranteed amount depending on

credit term.

– After 90 days, the fund is to pay default obligation making sure that

the lender has taken all countermeasures against borrower it has to do.

5 * €1=₮2,305.0 10/17/2014

Stabilization

(Outstanding Guarantees)

6 10/17/2014 * €1=₮2,305.0

2014.04 2014.05 2014.06 2014.07 2014.08 2014.09 2014.10

Loans 21,265 24,769 30,587 36,327 37,254 42,163 42,602

Guarantees 8,736 10,393 12,006 14,262 15,193 17,284 17,434

numbers 132 161 186 212 228 257 263

21,265

24,769

30,587

36,327

37,254

42,163 42,602

8,736

10,393

12,006

14,262 15,193

17,284 17,434

132

161

186

212

228

257 263

0

50

100

150

200

250

300

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

nu

mb

ers

Am

ou

nts

/mln

tu

gru

gs/

Extended guarantee

* 18,482 € /mln/

* 7,563 € /mln/

Challenges

– To expand its outreaches throughout the country by developing credit

guarantee system including suitable schemes, sustainable financing,

effective cooperation mechanism of central, local governments and

banking institutions,

– To enhance comprehensive guarantee products and related services to

SMEs development and growth focusing on thorough risk analysis

including legal, managerial as well as behavioral not merely relaying

on financial risks only.

– To strengthen and expanding cooperation with international institutions

(ACSIC, AECM and others) focusing on capacity building of personals,

exchanging best practices and transferring know-how. 7 10/17/2014

Thank you for your attention.

8 10/17/2014