The scandal over politicians granting themselves low-cost loans out of the fund to support small and medium enterprises became one of last year’s top news items. Earlier today (23 April) it reached another decisive point when Minister of Food, Agriculture and Light Industry MP B Batzorig tendered his resignation to G.Zandanshatar, Speaker of Parliament.

The trial of B.Batzorig was postponed on 17 March due to Prosecutor R.Batnasan having another urgent criminal case. In addition to MP Batzorig, 21 other MPs have been implicated as well as a number of other prominent former and current politicians.

The Small & Medium Enterprise Fund was overseen by the Ministry of Agriculture and Light Industry. In 2018 it was revealed that the SME Fund was a major source for bribes, and had been used by Prime Minister U.Khurelsukh to win votes and to prevent dissolving his cabinet.

The background to the SME Fund is as follows: In 2009, the Mongolian government expanded a fund to support small and medium enterprises. This provided companies with low-interest loans at 3 percent interest for up to five years and contained 2 billion Mongolian Tugrik (roughly USD 780,000 at today’s exchange rate). The fund is reported to have dispersed loans, totalling nearly 700 billion tugrik, or several hundred million U.S. dollars. The fund was created in – and continues to be overseen by – the Ministry of Food, Agriculture, and Light Industry

Over 78 thousand companies are active in Mongolia; most of them are small and medium enterprises. The sector provides jobs to a total of 800 thousand people. It was to support these companies that the fund was set up.