The Development Bank of Mongolia (DBM) placed emphasis on improving its corporate governance and profitability as well as the quality of loan portfolio this year, said DBM Chief Executive Officer H.Amartuvshin at a briefing held on December 26 at Kempinski Hotel.

More specifically, a special asset department has been set up at the bank, getting debts of over four billion repaid over the past five months. Following the investigations of the Government and National Audit Office, to eliminate duplication of functions, the number of the bank’s central administrative units was decreased by 18 percent, saving MNT3.1 billion from operational cost, in addition to salary budget cut of MNT 460 million. It was underscored that the bank’s salary budget of next year will be less than the previous year.

The bank is currently taking actions in phases to upskill its personnel, collaborate with international banks and financial institutions and introduce international quality management and information security standards. These are the actions related to structural changes of the bank.

The bank is also taking policy actions to be independent as much as possible from politics and focusing on its profitability and loan portfolio quality.

As of November, 2019, the bank’s overall assets amounted to MNT 4.2 trillion. The bank is now dealing with problem loans of 22 borrowers totaling MNT 704 billion and collaborating with the prosecutor’s office on eight borrowers’ loans of MNT 662 billion. In addition, 14 borrowers’ non-performing loans of MNT 45.9 billion have been brought to court. Terms and conditions of loans worth MNT 353 billion changed.

The Development bank is allowing business entities with active operations some additional time to repay their loans without requiring any legal actions against them.

Regarding construction and industrial investment, a total of MNT 620.1 billion of loans were issued for programs and projects of this area in the first 11 months of this year, which include,

Processing industry – MNT 314.7 billion,

Infrastructure of electricity, gas and ventilation -  MNT 107.2 billion

Mining and extractive industry MNT 83.8 billion, and

Other industry MNT 113.7 billion.

The DBM CEO highlighted that the DBM provides funding for manufacturing and industry that are export and long-term-growth-oriented and also deemed as significant for economic diversification and strategically important for the country’s economy.

In particular, Development Bank of Mongolia has invested a total of MNT 277.3 billion for 34 cashmere factories in the last two years to support the ‘Cashmere’ program, revised by the government in 2008. “DBM has been carrying on with the ‘Cashmere’ program this year and next loans within the program will be issued for companies in a timely manner soon after the Mongolian Lunar New Year holiday ” Mr. H.Amartuvshin said.