CREDIT GUARANTEE FUND IS TO SUPPORT SMALL AND MIDDLE PRODUCTIONS

Ulaanbaatar, Mongolia /MONTSAME/ A memorandum on creating a credit guarantee fund has been established with aims to implement laws on supporting small- and middle-sized productions and employment and to increase jobs. By the year 2011, some 73 thousand entities were registered in Mongolia, of them 40.9 thousand were carrying out permanent activities, and 35 thousand 789 entities belonged to the small- and middle-sized productions. Some problems have been facing the small- and middle-sized productions, especially the financial one. The government has started giving soft loans through commercial banks to businessmen, but risk criteria of these banks is still not affordable for these producers due to lack of pledge. This fund, created on an example of countries who have highly developed small- and middle-sized productions, will give credit guarantee to businessmen and to tackle their financial problems. A bill on the fund of credit guarantee was submitted to parliament on June 10 this year and was adopted later. The fund is expected to start with authorized capital of MNT 7.0 billion, of which 5 billion will be allotted from the government and 2 billion from donor organizations and private sector. Apart of this, MNT 39.1 billion has been placed in the budget package of the Minister of Industry and Agriculture for loans to be given to small- and middle-sized producers in accordance with the 2012 state budget law. The memorandum on the credit guarantee fund was signed on Monday by authorities of the Ministry of Finance, the Ministry of Labour, the Finance Regulatory Committee, the Bank of Mongolia, National Chamber of Commerce and Industry, Union of Banks, the Unified Association of Employers, the National Union of Agricultural Co-operatives, the "Sustainable Livelihood-2" project, and the German Agency for International Cooperation (GIZ). B.Khuder