AKIPRESS.COM - International Finance Corporation (IFC) and M bank, Mongolia's first digitally focused bank with a branchless model, joined forces to launch an innovative program to expand digital lending for small and medium enterprises (SMEs) in Mongolia, including women-owned businesses. It is part of IFC's ongoing efforts to promote an inclusive and sustainable financial sector in the country, Montsame reports.

IFC will provide up to $30 million in financing to M bank, with 25% 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% of the country's workforce and 17.8% 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% 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. We are also excited to pilot specific financial services for local businesses and merchants participating in supply chain," Deputy CEO of the M bank Temuulen Batmunkh said.

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," IFC Resident Representative for Mongolia Rufat Alimardanov noted.