IFC and MBA Work To Improve Access to Funding for Micro, Small and Medium Enterprises in Mongolia

A new agreement between IFC, a member of the World Bank Group, and the Mongolian Bankers Association (MBA) will help improve access to funding for 200,000 micro, small and medium enterprises (MSMEs) cumulatively over the next five years by developing a vibrant market for value chain finance in Mongolia.

Access to finance is a challenge faced by many Mongolian MSMEs, which struggle to obtain bank loans to sustain and expand their operations, as they do not own land or buildings that financial institutions generally seek as collateral. Value chain financing (VCF) is an innovative way to unlock additional funding for MSMEs as it allows them to leverage the higher credit standing of a larger buyer or seller to borrow from financial institutions. It could also enable them to take longer-term orders and be more resilient to short-term shocks.