Loans

Agriculture and Rural Development support project loan

Agricultural Sector Development Project Loan financed by the Asian Development Bank (ADB), aimed at developing agricultural value chains, supporting export-oriented and import-substituting products and production, expanding processing capacity, and strengthening raw material supply chains.

Terms and conditions

Condition	MNT
Maximum loan amount	Equivalent in MNT of USD 150,000–3,000,000
Term of loan	Up to 84 months
Loan interest /annual/	9.0%
Service fee	0.5% of the loan amount
Penalty interest	20% higher than the regular interest rate
Collateral	Have sufficient collateral to secure the loan amount.
Fee for changes to the original loan terms	Up to 0.3% of the outstanding loan balance, capped at MNT 1,000,000.
Application Fee	0 MNT
Grace period for principal repayment	Up to 24 months
Other	Have the capacity to finance at least 15.0% of the total project cost from own sources. Loan guarantee coverage of up to 60.0% of the loan amount may be provided by the Loan Guarantee Fund.

Actual cost /annual/: 9.94%

Requirements

Be a public limited company (JSC), limited liability company (LLC), or cooperative duly registered in accordance with the relevant laws of Mongolia;
At least 50% of the company’s ownership must be held by Mongolian nationals or entities;
Have been operating in the relevant sector for at least two years. For newly established businesses, all necessary preliminary studies and assessments must have been completed;
Have maintained a net profit margin of more than 2.5% based on financial statements for the last three years;
Have sufficient collateral to secure the requested loan amount;
Have the capacity to finance at least 15% of the total project cost from its own sources, in cash or other forms;
The project’s Internal Rate of Return (IRR) must exceed the Weighted Average Cost of Capital (WACC);
The project’s Economic Internal Rate of Return (EIRR) must exceed 9%;
The project’s payback period must be within the loan maturity period;
Have a confirmed and reliable source of raw materials;
Where the project involves the purchase or lease of land or buildings and facilities, a formal purchase or lease agreement must have been duly executed by the relevant parties;
Have completed the required environmental assessment for the project;
Conduct activities that do not have adverse environmental impacts and comply with the environmental requirements of Mongolia and the Asian Development Bank (ADB);
Maintain appropriate labor practices and comply with applicable labor standards;
Have no history of loans classified as non-performing or bad loans with banks or non-bank financial institutions (NBFIs), and have no outstanding overdue loan balances;
Other requirements as may be determined by the Bank.

Required documents

Loan form
Certificate of state registration of the organization, Articles of Association;
Operation license;
Board of directors’ approval of the loan, minutes of the shareholders’ meeting;
Original ID card of the authorized official, or if it is not possible to bring the original, a notarized copy;
Collateral documents;
Audit and tax reports and other income and expense documents;
Documents confirming the purpose of the loan and related agreements;
Other;