What Does the Bank of Mongolia Do to Promote Microfinance?
This paper discusses the activities concerning microfinance and its promotion in Mongolia. The year 2005 was declared as the "Year of Microfinance and Support to Small and Medium Entrepreneurship" in Mongolia through a Government resolution.
The paper explains that through microfinance promotion, the Bank of Mongolia plans to:
- Develop the legal and regulatory framework required for the efficient operation of NBFIs;
- Contribute to meet the Millennium Development Goal;
- Contribute to the socio-economic development of the country;
- Create jobs;
- Reduce and alleviate poverty;
- Increase outreach of financial services to low-income and rural remote households;
- Further develop the SME sector.
The paper states that the Microfinance Development Fund, established in order to expand the outreach of financially and institutionally sustainable microfinance services in rural Mongolia, aims to:
- Intensify the delivery of sustainable microfinance services to poor and vulnerable groups in terms of financial and organizational structure;
- Provide a wholesale loan to accredited MFIs for on-lending to the target population in the selected rural areas.
In conclusion, the paper mentions certain factors to look ahead to:
- Further creation of favorable legal environment for microfinance;
- Establishment of United Financial Supervisory Agency;
- Introduction of new regulatory framework in order to prevent possible risks;
- Adoption of an Anti-money Laundering Law;
- Further coordination of donors' and government policies with the development of MFIs in Mongolia.