“The Project Implementing Unit of the Two-stage Project for Small and Medium Enterprise Development is now established and officially started working today at the Ministry of Finance (MOF),” T. Dorjkhand, Deputy Director of Loan Aid Coordination and Regulatory department told MonInfo on Monday.

“We are assuming that we will organize a training about the project to the commercial banks next week,” he added.

Six commercial banks of Mongolia, TDB, Golomt, Xac, Zoos, Khan and Capitron banks signed on transfer loan agreements with Ministry of Finance of Mongolia.

“We have announced last week that Golomt bank is now accepting applications from its customers for the small and medium enterprise development loans” said B. Bayartbileg, loan economist of the investment and project loan deparment at Golomt.

“We are on a stage of studying the loan. But our assumption is that the interest of the loan in MNT could be 11-15 percent a year and in USD it could be 9-11 percent per year,” he added.

However MOF officials said that the banks will be under checks from the Mongolian government to ensure correct utilization of the money.

“The Project Management Committee is also being established in order to approve and to see if loan proposals accepted and sent from commercial banks meet with government policies and see if the amount is within the framework of the principles,” said T. Dorjkhand.

D. Batsaikhan, Vice President responsible for Business of Khan Bank said, “We are assuming that we will be able start issuing the loans from December 1. We are negotiating with the Ministry of Finance on the amount of interest on Friday.”

“We will set the amount of interest based on the expenditure of interest.”

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 to the Government of Mongolia.

The loan will be issued for 3-10 years for small and medium enterprises. Requirements for the loans are 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 has 50 or fewer employees.