Ulaanbaatar
FCR: Maximum Interest Rate for Lending to Be 4.5 Percent
Economy
Ulaanbaatar, January 24, 2024 /MONTSAME/. The Money Loan Activities Policy Council under the Financial
Regulatory Commission
(FRC) held a meeting and set the
maximum interest rate for money lending to be 4.5 percent monthly.
The Financial Regulatory Commission reported that the
maximum interest rate, the general formats of loan, pledge, and
guarantee agreements, and the methodology for calculating the interest rates,
approved by the Money Loan Activities Policy Council will be followed from
March 1, 2024.
The fact that countries set the upper limit of loan interest
rates and make detailed regulations by passing laws to prevent consumers from
being burdened with excessive interest payments and debt, improve access to
credit services, create financial stability, and increase economic
productivity.
Regulatory transparency empowers consumers to make more
informed decisions and has positive economic impacts. In Mongolia, pawnbroking had
not been regulated and violated the rights of consumers with high interest rates and improper calculation of penalties on arrears. Therefore, in 2022, the
State Great Khural approved the Law on Regulation of Money Loan Activities.
Translated by Sainzaya Davaajamts
