Just six percent of small- and medium-sized businesses taking part in a loan program have applied for loans from the state. The rest have applied for loans from commercial banks.

The Government has made low-interest MNT 30 billion loans available to businesses since 2009. According to the Small- and Middle-sized Enterprises (SME) Board, 5,502 people have been employed as a result of the Government’s loan program. The SME Board also says MNT 30 billion was loaned to small factories through commercial banks in 2010.

Under another program, the Government began issuing MNT 150 billion in bonds in July to fund loans for private factories in soums. Soum officials choose the recipients of the loans. But, since many businesses in soums have little or no collateral, many of the loans have ended up going to businesses in aimag centers.

The proposed 2012 state budget includes MNT 24 billion for loans under the Soums Production Development Fund. Countryside residents can spend the money on agriculture, and meat and milk production.  

An official source says residents of the capital have requested a similar program, but the amount of money needed to fund it would be much greater than in the countryside.