Khan Bank shareholders are Sawada Holdings Co., Limited (52.98%), Tavan Bogd Trade Co., Ltd (22.35%), Mrs. D. Hulan (12.97%), IFC (9.07%), Development Alternatives Inc. (1.79%), and Morrow Family Revocable Trust / Partnership (0.85%). Sawada Holdings Co., Limited, listed on Osaka Stock Exchange, is a holding company, which owns shares of other companies mainly engaged in financial business. Tavan Bogd Group is one of the largest private conglomerates of Mongolia with its twelve affiliated companies, engaged in retail and whole sale, travel and tourism, manufacturing and food production. Development Alternatives Inc. is an international project management and consulting company engaged in development work principally in business and finance, agriculture, and crisis mitigation. Khan Bank has been IFC’s client since 2004. The Bank, with 500 branches across all of Mongolia with more than 3,800 employees, is the largest bank in Mongolia, providing banking services to an estimated 80% of Mongolian households.   The Bank finances corporate, small and medium businesses, consumers, and individuals.   

The proposed IFC investment is a subordinated loan of $20 million for IFC’s own account.

20.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity

* These investment figures are indicative

Khan Bank is headquartered in Ulaanbaatar, Mongolia. The Bank has the largest branch network in Mongolia with a total of 500 branches and sub-branches in 21 provinces.

1. Increase access to finance to small and middle enterprises in Mongolia; 2. Create jobs and improve livelihood as a result of supporting access to finance; and 3. Support the Mongolia banking sector by strengthening the capital position of the largest bank in the country.

1. IFC's global experience in microfinance sector, in particular, in emerging markets; 2. IFC's substantial investment experience in Mongolia's banking sector, resulting in greater understanding of risks and opportunities under the context of financial crisis and economic recovery; 3. IFC's longstanding partnership with leading banks of the country, contributing to the stability of the financial sector as a whole; 4. IFC's advisory capabilities to help strengthen the Bank's governance and operational capacity.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. As an existing client, Khan Bank has developed a social and environmental management system (SEMS), appointed staff to oversee the SEMS implementation, and submitted annual reports to IFC. The bank will be required to upgrade its SEMS by strengthening the monitoring and supervision procedure prior to IFC’s disbursement for the new project and continue to ensure its lending activities will comply with IFC Exclusion List, applicable Mongolian E&S laws and regulations and other requirements established in the SEMS. The bank will also be required to follow the principles established by the IFC Performance Standard 2: Labor and Working Conditions in its HR practices. IFC will continue to monitor the bank’s SEMS implementation and E&S performances.