Since June 3rd, 2014, XacBank and IFAD's project unit has been cooperating on the "Market and Pasture Management Development" loan guarantee program.
Guarantee Program Purpose:
- Provide loan guarantees for businesses that lack the necessary collateral for loans;
- Promote value added returns in the agriculture industry;
- Create job opportunities;
- Part of the government implemented agenda to provide support to small and medium-sized manufacturers within the SME sector, as well as livestock owners, raw materials suppliers, herders, farmers, and small and medium-sized industrial projects.
Guarantee Program Terms:
|Maximum amount of loan||1. Up to the equivalent of 300,000 USD in MNT for SME factories;|
2. Up to the equivalent of 100,000 USD in MNT for herders and suppliers.
|Guarantee percentage||1. 50% of loan for SME factories;|
2. 60% of loan for cooperatives.
|Guarantee Period||The guarantee period of up to 5 years is to be consistent with the loan term period entered into between the bank and the borrower according to the contract.|
|Guarantee commission||Aside from the fees and commissions paid by the borrower to the bank, the borrower must also pay in advance the equivalent of 1% of the present value of the guarantee loan amount on a one time, non-refundable basis.|
|Loans covered by guarantee||1.2 stage JICA loan;|
2.SME development fund;
3.ADB's "Agriculture and Rural Development Project";
4.Other funds financed through the government;
5.Commercial and other loans.