The project’s main sponsor is HS Securities Co., Ltd. (HS), part of the HIS Group (HIS), a publicly listed conglomerate on the Tokyo Stock Exchange. HS was established in 1998. In January 2003, HS successfully placed a bid to purchase 100% of Agbank. Subsequently, a 40% share in the bank was sold to a diversified Mongolian company, Tavan Bogd Trade, which is owned by three local individuals.

The total project cost is estimated at $3.0 million for IFC’s own account in the form of a subordinated Tier II loan.

3.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	1.80
Equity	1.20

* These investment figures are indicative

The bank is headquartered in Ulaanbaatar and has 377 branches across Mongolia. Loans can be made throughout the country.

This is a category FI Type 1 project according to IFC’s environmental and social review procedure. Agbank will establish an environmental management system to ensure that activities financed under relevant operations are consistent with applicable environmental, occupational health and safety regulations of Mongolia and IFC''s Microfinance Exclusion List; designate appropriate individuals who will have responsibility for the environment and who will attend IFC’s environmental management workshops or an approved equivalent; submit to IFC an environmental management plan; and submit to IFC annual environmental performance reports.
Location of environmental documents in locally affected community

The project has a strong developmental impact, assisting Agbank to expand operations in support of productive micro and small businesses, herders and small agricultural enterprises in rural areas across Mongolia nationwide. Agbank is the leader among Mongolian microfinance lenders with an average loan size of about $400 equivalent. IFC’s proposed investment will support and help to sustain the strong growth it has demonstrated in recent years. Its loans, including those classified as consumer loans, are put to productive uses within Mongolia’s extended families thereby supporting livelihoods, employment generation in the private sector, and particularly in low income rural communities. The institution's strong performance, as demonstrated by its portfolio growth and profitability, its methodology and its control mechanisms and its outreach in rather remote and geographically challenging areas will serve as "best practice" examples for other rural finance institutions, state-owned and slated for privatization or otherwise. IFC’s support, both financial and knowledge sharing, is key to the successful post-privatization development of the bank. IFC expects to also play a strong role in introducing and establishing good corporate governance and will strongly support the continued focus on the provision of small loans and financial services in rural areas.