The Government set a goal of building 100,000 new apartments between 2008 and 2012, with the aim of providing housing for low- and middle-income families. The program aims to build 750,000 apartments in Ulaanbaatar and 250,000 in local settlements.

But the Government has not implemented the program in 2011. It blames the Development Bank, which was established to finance the program but did not function for some time due to a lack of capital. The bank recently borrowed USD 20 million at seven percent interest, but its first project will be railway construction.
The Government says it will implement the program when it sells bonds on foreign markets in 2012.

Also, commercial banks have increased interest rates due to the Mongol Bank’s strong monetary policy. Banks had interest rates of 1.3 percent before October 2011, but now banks have interest rates between 1.6 and 2.0 percent.

The Government decided to take out a six-percent loan to finance the 100,000 apartments project. But it has not gone through yet because Mongol Bank has opposed the Government’s decision. Mongol Bank President L.Purevdorj said if all apartment loans are at six percent, that would damage the country’s economy.