Problems with collateral
were reported to have affected the disbursement of MNT30 billion as loans to
small and medium enterprises in all 21 provinces and six districts of Ulaanbaatar,
particularly in the countryside. D.Batmagnai, officer in charge of Finance and
Investment of SME, answers questions on the matter.

How
much loan has been given so far?

The target has been met 99
percent in Ulaanbaatar and 95 percent in the provinces. The national figure is
92 percent. Loans are being given through Khan Bank, XasBank and Savings Banks
in the countryside and through Capitron Bank, Golomt Bank and Ulaanbaatar Bank
in Ulaanbaatar.

There
were complaints that people in regions without banks were not able to get the
loans. What finally happened?

Khan Bank has branches in every
soum in all 21 provinces, and Savings Bank and XasBank may not have branches in
some soums, but they do have branches in all provincial centers. The main
problem was with collateral. The people in the countryside do not have enough assets
to offer as security. The banks evaluate assets at market rates. The most
promising projects are selected. Applicants are not always happy with the
banks’ decisions.

How
many loan applications are received per year?

The Government spent MNT1
billion to encourage SMEs in 2008. This works out to, only about MNT60-70
million per province. In 2009 and 2010, when MNT 30 billion was budgeted nationwide,
one province got about MNT700 million. But even this is not enough. Organizations
and individuals submit about 6,000 proposals and only about 10 percent of them
are issued these special loans.

Will
projects rejected this year be reconsidered next year?

It is possible. Many viable
proposals could not be approved for a loan. Some of them may get financial help
from foreign projects. Most of the proposals are about manufacturing and
refining raw materials.