52089 - MFP-SME KhanBank OSB

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Summary of Investment Information

Project Number

52089

Company Name

KHAN BANK JSC

Date SPI Disclosed

Feb 18, 2026

Country

Mongolia

Region

East Asia and the Pacific

Projected Board Date

Mar 25, 2026

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Apr 30, 2026

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Mar 20, 2026
Signed : Mar 26, 2026
Invested : Apr 24, 2026

Sector

Commercial Banking - General

Project Description

The project involves (1) up to US$130 million investment in Khan Bank JSC (“Khan Bank” or “the Bank”) for IFC’s own account, consisting of (i) a 5-year USD-denominated senior loan of up to US$80 million; (ii) a 3-year USD-denominated senior loan, of up to US$20 million; and (iii) a Mongolian Tugrik (MNT)-linked loan of up to US$30 million equivalent, with a tenor of up to 5 years with the option to reset the rate at year 3, and (2) a 3-year USD-denominated senior syndicated loan of up to US$150 million to the Bank (the “Project”).

The Project is intended to support the expansion of the Bank’s lending program for micro, small and medium enterprises (MSMEs) in Mongolia with carve-outs to women-owned/led MSMEs, rural MSMEs, MSMEs operated by young entrepreneurs, and agricultural MSMEs. In addition, IFC will provide a package of cross-currency swaps for the borrower to hedge up to US$300 million in FX exposure stemming from the USD loans.

Associated Advisory Engagement

The Project will be supported by an advisory service (AS) engagement aimed at helping Khan Bank in scaling up its climate-smart agriculture (CSA) financing. This support will focus on enhancing data collection, developing robust risk models, piloting innovative lending approaches, and strengthening risk management across key agricultural value chains. Throughout the AS engagement, the AS team will integrate gender considerations, foster partnerships with AgTech providers, and embed GHG reduction tracking into lending processes, complemented by targeted training and ongoing monitoring to refine products and ensure sustainable, long-term impact.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management	10.0
Guarantee
Loan	140.0
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to Woman-Owned SMEs
Straight Senior Loan	Loans to MSME (mix of Micro and SME)
Straight Senior Loan	Others (only if UoP is not available)
Syndications	Loans to MSME (mix of Micro and SME)
Syndications	Loans to Woman-Owned SMEs
Syndications	Agri Finance
Straight Senior Loan	Loans to MSME (mix of Micro and SME)
Straight Senior Loan	Loans to Woman-Owned SMEs
Straight Senior Loan	Agri Finance
Syndications	Loans to MSME (mix of Micro and SME)
Syndications	Loans to Woman-Owned SMEs
Syndications	Agri Finance
Client Risk Management	Loans to MSME (mix of Micro and SME)
Client Risk Management	Others (only if UoP is not available)
Client Risk Management	Loans to MSME (mix of Micro and SME)
Client Risk Management	Others (only if UoP is not available)

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

Increased access to finance for MSMEs and WMSMEs and youth: Through the Project, IFC expects to support Khan Bank in further growing its financing to MSMEs and WMSMEs. The use of proceeds will be 100% MSMEs, of which (i) up to US$40 million will be earmarked exclusively for on-lending to WMSMEs, (ii) up to US$20 million will be earmarked for on-lending to MSMEs operated by young entrepreneurs, and (iii) up to US$15 million will be earmarked for on-lending to rural MSMEs. Increased access to finance for agriculture: In Mongolia, limited access to finance remains a major constraint for the growth and modernization of the agricultural sector. The lack of medium- and long-term financing continues to hinder agro-enterprises from investing in productivity and value addition. Through the proposed investment, US$15 million will be earmarked for on-lending to agricultural MSMEs. Competitiveness: Through this transaction, IFC aims to strengthen the competitiveness of Mongolia’s MSME sector, a key driver of economic diversification and job creation. IFC’s support will also enable Khan Bank to expand into new asset classes and increase lending to youth entrepreneurs and agricultural businesses.

Non-Financial Additionality Knowledge, innovation, and capacity building: the Project will be supported by an AS engagement aimed at helping Khan Bank in scaling up its CSA financing. This support will focus on enhancing data collection, developing robust risk models, piloting innovative lending approaches, and strengthening risk management across key agricultural value chains. Financial Additionality Financing Structure: The proposed investment will provide Khan Bank with much needed stable mid- and long-term funding of up to five years, which is not readily available in the market and enable the Bank to diversify its funding currencies through a local currency facility of up to US$30?million equivalent, supporting the Bank to mitigate its currency mismatch. Resource Mobilization: Through the proposed investment, IFC will play an active and direct role in mobilizing financing of up to US$150 million from international lenders, sending a strong signal to the market, raising awareness to foster innovation in the banking sector.

Indicator	Metrics	Comments
Number of Outstanding Loans, MSMEs	number
Number of Outstanding Loans, Women-led MSMEs	number
Value of Outstanding Loans, MSMEs	$
Value of Outstanding Loans, Women-led MSMEs	$

E&S Category Rationale / Risks and Mitigation

The Project entails a financial package, including syndicated loan facility, with the use of proceeds to support Khan Bank’s expansion of its lending programs for MSMEs in Mongolia. Khan Bank lends predominately to retail customers and MSMEs. Its MSME portfolio consists of borrowers primarily in industries such as motor vehicle sales and service, agriculture and forestry, processing industry, construction, services, and transport and storage. The Project has been categorized as FI-2 as the activities supported by the Project are expected to be of moderate E&S risks. The Project will not support coal-related activities, activities on IFC Exclusion List, or higher E&S risk activities that may include (a) involuntary resettlement, (b) risk of adverse impacts on indigenous peoples, (c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage, (d) risk of retrenchment, or (e) significant occupational health and safety risks.
The applicable E&S performance requirements for the Project include IFC Exclusion List, applicable Mongolian E&S laws and regulations, and other restrictions including screening out higher E&S risk activities. Khan Bank is required to implement the Environmental and Social Management System (ESMS) to assess and manage E&S risks at the level of asset class supported by the Project consistent with the aforementioned applicable E&S performance requirements.

Under the previous IFC investments, Khan Bank has developed and implemented an ESMS consistent with the requirements of IFC Performance Standard 1. The ESMS includes the following key aspects: E&S policy, E&S roles and responsibilities, internal organizational and competency development, E&S screening procedures and tools to identify the risks and impacts of client activities, monitoring and review of portfolio, and external communication mechanism. For this new Project, Khan Bank will be required to maintain the proper E&S capacity and to continue to implement its ESMS following the Project’s applicable E&S performance requirements. Khan Bank’s labor management is consistent with the requirements of IFC Performance Standard 2 on Labor and Working Condition.

S.no	Title	Anticipated Completion Date	Status
1	Review and update relevant policy and/or procedure to align with child protection policy requirements	04/30/2026	Completed
2	Train relevant Staff on ESMS implementation	04/30/2026	Completed

Contacts

For Inquiries About the Project, Contact

Khan Bank JSC
Ariunbat Dagva
Executive Vice President of Wholesale Banking
+976 7515 3333
investmentbank@khanbank.com
Khan Bank tower, Chinggis Avenue-6, Stadium Orgil-1, Khan-Uul district, Ulaanbaatar-17010, Mongolia
www.khanbank.com

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

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Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

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Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

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Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

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CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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