IFC Provides $30 Million to M bank to Increase Digital Lending for Women and Small Businesses in Mongolia

Ulaanbaatar, May 8, 2024 /MONTSAME/. To expand digital lending for small and medium enterprises (SMEs) in Mongolia, including women-owned businesses, IFC and M bank, Mongolia's first digitally focused bank with a branchless model, joined forces to launch an innovative program in Ulaanbaatar today. It is part of IFC’s ongoing efforts to promote an inclusive and sustainable financial sector in the country. 

IFC will provide up to $30 million in financing to M bank, with twenty-five percent of the funding earmarked for SMEs owned by women. As part of the program, IFC has been working with M bank to expand its SME finance and supply chain finance products and services. IFC will also provide technical guidance to help M bank further develop and implement an environmental and social management system. 

SMEs, of which two-thirds are women-owned in Mongolia, account for about 70 percent of the country’s workforce and 17.8 percent of GDP. Yet access to finance for SMEs in the country remains challenging with only about half of them receiving financing support from banks. According to the World Bank Enterprise Surveys in 2019, 31 percent of surveyed firms in Mongolia face full credit constraints, surpassing the average for other countries in the East Asia and Pacific region.

“At the forefront of digital transformation in Mongolia, M bank is optimistic that our partnership with IFC will further enhance our digital lending capabilities and provide tailored financial solutions to customers across the country,” said Temuulen Batmunkh, Deputy CEO, M bank. "We are also excited to pilot specific financial services for local businesses and merchants participating in supply chain."

M bank has rapidly grown since obtaining its commercial banking license in February 2022. With total assets exceeding $200 million and nearly 40,000 borrowers as of December 2023, M bank is wholly owned by MCS Group, one of Mongolia’s largest companies, and has a goal to grow by leveraging MCS Group’s franchise across the country. 

"Mongolia, as the most sparsely populated country, can greatly benefit from digital solutions to expand access to essential services nationwide," said Rufat Alimardanov, IFC Resident Representative for Mongolia. “We are excited to leverage our capital and expertise in supporting a digitally-focused bank in the country to promote market competitiveness and inclusive economic growth."

In Mongolia, IFC has provided $345 million in financing and technical advice to local financial institutions in the past five years.