Ulaanbaatar
Financial Regulatory Commission Revises Debt-to-Income Ratio of Consumer Credit
Economy
Ulaanbaatar, March 21, 2025 /MONTSAME/. The Financial Regulatory Commission of Mongolia (FRC) has determined that the debt-to-income ratio for consumer credit products issued by non-banking financial institutions and the loan-to-value ratio for consumer credit for the purchase of passenger cars will not exceed 60 percent.
The decision is expected to reduce the risk of citizens becoming overcome by debt burden, increase the real income of households, and improve purchasing power. Moreover, to increase the risk-bearing capacity and solvency of non-banking financial institutions, the FRC revised the ratio of trust services, bonds, and external financing.
In 2023, to reduce the risk of debt burden on citizens due to the demand and supply of non-banking financial institutions, the FRC had set the debt-to-income ratio for online loan products would not exceed 70 percent. Furthermore, in 2024, the debt-to-income ratio for consumer credit and consumer credit for the purchase of passenger cars was set to not exceed 70 percent.
However, the FRC reported that it was necessary to reduce the ratio applicable to the regulation of consumer loans taking into account the economic situation, changes in the prices of mining products on the international market, the increase in the prices of consumer goods and services, the demand for foreign exchange reserves dependent on import consumption, the increase in the policy interest rate by 2 percentage points to 12 percent, and the reduction of the debt-to-income ratio limit of banks for consumer loans to 50 percent.
Related news
