Ulaanbaatar, March 7, 2005
—The Mongolia Leasing Development Project was officially established today by the International Finance Corporation to promote leasing as a tool to support business. The project responds to the lack of access to finance for many Mongolian businesses, especially in the mining, construction, and agriculture sectors. The project is generously supported by the Japanese government.
Strengthening the financial sector, and leasing in particular, is part of the Mongolian government’s plan for the economic development of the country in 2004-2008. IFC’s leasing project will advise the government on creating an appropriate legal enabling environment and taxation regime for leasing. The project will train and advise Mongolian leasing companies, banks and equipment suppliers on best practices in conducting lease transactions. To stimulate the market growth further, the project will educate potential leasing clients and investors on the benefits of leasing as a mechanism to acquire capital assets.
“Leased equipment helps produce essential goods and services that contribute to economic growth and job creation,” said Ms.
Karin Finkelston
, Associate Director of IFC’s East Asia and Pacific Department. This project follows in the footsteps of previous IFC support forthe financial sector in Mongolia through its investments and loans to Mongolian banks, including Trade and Development Bank, XacBank, and Khan Bank. In preparation for today’s launch, the project has been updating previous analyses of the status of leasing in Mongolia, assisting the revitalization of the Mongolian Leasing Association and, together with that Association, drafting various legal and tax amendments and a leasing bill. The project has also started organizing training courses on leasing for different groups of stakeholders and disseminating information on leasing in the media.
The ceremony launching the project took place today and included addresses by deputy minister of finance and deputy minister of Industry and Trade, H.E. the Ambassador of Japan, the acting director of IFC's Private Enterprise Partnership, representatives of the Leasing Industry and other stakeholders.
Leasing has been a successful instrument of financing fixed assets in many economies, including those in the Commonwealth of Independent States, Eastern Europe, Africa, Asia and South America. In Mongolia, representatives of the government, the private sector, and the donor community have recognized the potential of leasing for economic development due to the demand for fixed assets and a scarcity of collateral and sources of finance.
IFC has a long history of supporting leasing throughout the world: IFC initiated the establishment of the first leasing company in 25 countries; IFC has invested in more than 100 leasing companies in over 50 countries; and its total investment in leasing over the last 30 years has been more than $1 billion. IFC has also successfully implemented leasing projects in Russia and the former Soviet Union and the former Eastern European countries and is assisting the leasing industry in African, South American and Asian countries.
The International Finance Corporation is the private sector arm of the World Bank Group. The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in emerging markets, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in transition and developing countries, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
