The State budget has allocated 150 billion MNT to support small-to-medium enterprise this financial year. This money has been set aside for programs but there have been complaints that these programs have nothing to do with small and medium enterprisers.

Struggling private enterprisers or financially restrained business that need financial help are unable to step over the threshold of the bank requirements to get the loans.

Therefore the Credit Guarantee Fund was established officially aiming to solve these difficulties.

MP and member of the Standing Committee on Budget, Ts.Davaasuren, the Chairman of Executive board of the Credit Guarantee Fund, G.Kherlen and the Assistant to the Speaker of Parliament Z.Narantuya attended and cut the ribbon at the ceremony for the establishment of the Credit Guarantee Fund.

Member of the Standing Committee on Budget, Ts.Davaasuren said that “the law on the loan guarantee fund was in answer to a social demand. The Fund has been established now to support small and medium enterprisers who have not enough current assets or who have failed to get a bank loan. I hope the Credit Guarantee Fund will bring reform in the financial sector”.

The Government of Mongolia, Mongolian National Chamber of Commerce and Industry and the Mongolian Employer”s Federation agreed to jointly establish the Credit Guarantee Fund and approved rules for the fund in November 2012.

Now the Credit Guarantee Fund is open and to run officially.

The long expected Credit Guarantee Fund will provide collateral of up to 60 percent on a loan. A creditor who has 40 percent in their own collateral can take loans from the bank via the Credit Guarantee Fund using collateral security.

The Credit Guarantee Fund can provide 250 million MNT collateral for three schemes at once, such as current assets, investment and micro loans.

According to the Executive Director of the Credit Guarantee Fund, Sh.Altankhuyag, it was estimated that the Fund will provide 50 billion MNT collateral in total in the 2013 financial year. Government will cover 100 percent investment for the Fund.