Oikocredit invests $8M in Mongolian bank, XacBank
Oikocredit has joined eight other investors in a syndicated loan to XacBank in Mongolia, totalling US$ 108.5 million. Around US$ 30 million of the loan facility will be purely dedicated towards supporting female-owned or operated micro, small and medium-sized enterprises.
XacBank is a Mongolian banking and financial services company headquartered in Ulaanbaatar which offers a full range of financial services to consumers, micro entrepreneurs and small to medium enterprises (SMEs) in rural and urban areas. This transaction is the largest syndication for a Mongolian commercial bank to date.
The US$ 108.5 million syndicated loan was co-aranged by IFC, a member of the World Bank Group and Dutch development bank FMO.
Oikocredit country manager for Kyrgyzstan, Shabdan Tagaev, who is responsible for Oikocredit’s Central Asia and Mongolia portfolio, said Oikocredit was very pleased to be part of this syndicated loan. “This loan is our biggest to date in Mongolia, and we’re happy to be partnering with so many high-quality, like-minded organizations. XacBank has a strong reputation in Mongolia, and shares Oikocredit’s triple bottom line of social, environmental and finance goals. We believe this syndicated loan will provide the bank with much-needed long-term capital to empower more people in Mongolia,” said Tagaev.
Amartuvshin Hanibal, President of XacBank, said: “This financing demonstrates the confidence that IFC and other global co-lenders have in XacBank and sends a positive signal to the market. We believe this funding will have a great impact on local companies, jobs, and economic development.”
As one of the best-recognized socially-oriented financial institution in Mongolia, XacBank has won several social performance awards including one from CGAP. The bank is also a pioneer in the field of clean energy finance.
The facility comprises an IFC ‘A loan’ of US$ 15 million and an aggregate of US$ 93.5 million of ‘B’ and ‘parallel loans’ from eight international financial institutions, including Oikocredit. The US$108.5 million loan, includes the following: US$ 15 from IFC, US$ 25 from FMO, US$15 million from Women Entrepreneurs’ Debt Fund, US$ 10 million from Finnfund, US$ 10 million from IIB, US$ 10 million from Swedfund, US$8 million Obviam, US $8 million from Oikocredit and US$7.5 million AfrAsia Bank.
XacBank has been an Oikocredit partner since 2005.
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