Mongolia—SME Leasing Policy Initiative

During the past decade, Mongolia has experienced strong economic growth supported almost single-handedly by its mining industry—primarily copper, coal, and gold. Mongolia has also progressed significantly in developing and strengthening its financial services and regulations. Access to financial services for the private sector has improved, albeit not equally for all businesses.

DAI helped to improve the performance of Mongolia’s financial sector in serving small and medium-sized enterprises (SMEs), particularly those that contribute to the mining value chain but whose owners do not have the substantial collateral required to finance their businesses’ growth. By leasing or leasing-to-own durable goods such as vehicles, equipment, and appliances, these small-business owners can focus on their operations and sales without having to put up precious collateral such as their homes.

Funded by the European Bank for Reconstruction and Development, the SME Leasing Policy Initiative analyzed the demand for leasing in the SME financial sector and identified opportunities for the development of new financial products.

Select Results

• Increased knowledge of (and demand for) leasing through a public information campaign.
• Built the supply of leasing by improving the operations of two leasing companies.
• Assisted in improving tax policy and revising regulations of the Mongolian Ministry of Industry’s SME Development Fund, which offers subsidized loans to SMEs through commercial banks.