The Mongolian Cabinet has projected no money for Small and Medium Enterprises (SME) Development Fund in the 2021 State Budget. In other words, the controversial SME Funds will be stopped.
This year, the SME Development Fund has granted soft loans worth MNT 52.3 billion. Last year MNT 4 trillion was granted to small and medium enterprises, representing an increase of MNT 719.7 billion compared to 2018.
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. The SME Fund was to support these companies that the fund was set up. This provided companies with low-interest loans at 3 percent interest for up to five years. However, a huge corruption case was uncovered regarding the provision of soft loans; it was revealed that ministers and politicians has been illegally benefiting from the SME Fund.