“The Ministry of Finance is planning to organize training to those commercial banks regarding the procedures and requirements of the loan. We will also organize a workshop at the Japanese-Mongolian center for those interested enterprise and citizens in order to introduce about the loan. We hope that commercial banks will be able to start issuing loans for interested applicant enterprises before 2007,” Z. Munkh-Orgil, officer of the Loan Aid Coordination and Regulatory Department at the Ministry of Finance informed MonInfo Thursday.

“The two-stage project for small and medium enterprises development and environment conservation,” which is to be implemented by the resource of conventional loans from the Government of Japan was approved by parliament on May 31, 2006.

“The total resource of the conventional loan is US $25 million and the Government of Japan is handing over the budget through the Japanese Bank for International Cooperation, which is the Japanese Government Implementing agency working with the Government of Mongolia,” said Munkh-Orgil.

“Trade and Development bank was the initial contractor with the Ministry and once the bank has the loan resource from the Ministry of Finance then the bank will start the loan issuance process, according to suitable criteria and conditions,” said Ts. Sergelen, an officer at the Financial organizations department at Trade and Development Bank.

“The loan will continue for 3-10 years for small and medium enterprises. We put requirements for them such as the enterprise has to be a corporate income tax payer of 15% and has to be an industrial activity runner which does not have bad environmental consequences, and have 50 or fewer employees” said B. Bayarbilegt, loan economist of the investment and project loan deparment at Golomt.

“We are assuming the interest of loan in MNT could be 15-18 percent a year and in USD it could be 10-12 percent per year. Profit making enterprises are required to finance 20 percent of loan. Only 80 percent is to be financed by the loan,” he added.

Small and medium private organization can apply for loans between US $10 – 600,000.

In September, the European Bank for Reconstruction and Development also granted a US $6 million loan to XacBank for small enterprise loans.