Ulaanbaatar, 28 June 2012
—IFC Capitalization Fund will invest up to $40 million in subordinated debt in XacBank to strengthen the bank’s capital base and increase access to finance for Mongolia’s small and medium enterprises and middle-income home buyers. This is IFC Capitalization Fund’s first investment in Mongolia.
IFC Capitalization Fund is a global equity and subordinated-debt fund founded by IFC, a member of the World Bank Group, and the Japan Bank for International Cooperation. It aims to support banks considered vital to the financial system of emerging-market countries. The fund is managed by IFC Asset Management Company, a wholly-owned subsidiary of IFC.
The investment will support XacBank’s expansion plans and help increase access to finance for small and medium enterprises, which are key drivers of jobs and growth. XacBank is Mongolia’s fourth-largest bank and a leading microfinance lender.
"IFC's financing enables us to maintain a comfortable level of capital adequacy to enhance our solvency, at a time when the global economy is weak and its impact on the Mongolian economy is uncertain,” said Bat-Ochir Dugersuren, CEO of XacBank. “It will also increase our capacity to extend our market share at a faster rate."
“This investment will bolster XacBank’s capital base, provide access to SME financing, and help increase international investors’ confidence in the country,” said Marcos Brujis, head of the IFC Capitalization Fund. “We look forward to strengthening our partnership with an established local player, helping it develop in the fast-growing Mongolian economy.”
XacBank is a longstanding IFC client. In 2008, IFC became the shareholder of Tenger Financial Group, the holding company of XacBank, with a 15.2 percent stake and also appointed a director to the board. In addition to capital, IFC provided advisory services to strengthen the bank’s corporate governance and banking operations. Earlier this year, IFC invested $1.6 million in Tenger Financial Group’s joint venture in China to help expand access to finance for small businesses in China’s less-developed region of Xinjiang and support economic cooperation in Central Asia.
Resource-rich Mongolia became the world’s fastest-growing economy last year and growth is expected to remain at a double-digit rate over the next five years.
IFC, a member of the World Bank group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving our investments to an all-time high of nearly $19 billion. For more information, visit
About IFC Asset Management Company
IFC Asset Management Company LLC, a wholly-owned subsidiary of IFC, invests third-party capital, enabling outside investors to benefit from IFC’s expertise in achieving strong equity returns, as well as positive development impact in the countries in which it invests. It manages the $3 billion IFC Capitalization Fund, the $1 billion IFC African, Latin American, and Caribbean Fund and the $182 million Africa Capitalization Fund.
About Japan Bank for International Cooperation
Japan Bank for International Cooperation (JBIC) is a policy-based financial institution wholly owned by the Japanese government
.JBIC has the purpose of contributing to the sound development of Japan and the international economy and society, by taking responsibility for the financial function to promote the overseas development and securement of resources which are important for Japan, to maintain and improve the international competitiveness of Japanese industries and to promote the overseas business having the purpose of preserving the global environment, while having the objective of supplementing the financial transactions implemented by ordinary financial institutions. JBIC also provides the financial services that are necessary to prevent disruptions to international financial order or to take appropriate measures with respect to damages caused by such disruption. For more information, visit www.jbic.go.jp/en
XacBank is one of Mongolia’s largest banks, serving micro customers, small and medium-sized businesses as well as large corporations with a range of inclusive banking, fair investment and other financial products and services. It operates in all 21 Mongolian provinces and the capital city serving more than 500,000 customers through its retail and business branches as well as specialized banking outlets which includes. The bank has a domestic network of almost 100 branches and employs 1,600 people. XacBank is rated B1 by Moody’s and B with Stable Outlook by Fitch. For more information, visit