Local financing is possible for foreign invested companies in two ways. Jointly entering a business with Mongolian investors, or directly from Mongolian financial institutions.
The banking and financial services sector have developed rapidly since Mongolia has transitioned from Socialism to Democracy in 1990, where the first private bank had opened its doors. Now, the banking sector is a competitive market with over thirteen different commercial banks, and currently Khan Bank, Trade and Development Bank and Golomt bank are the big players, dominating the market in terms of lending. There are still no fully licensed foreign banks here in Mongolia. Commercial interest rates are high for local currency. As of September 2024, the weighted average interest rate of Commercial banks was 17.4% on local currency of MNT, according to Mongolian Banking Association’s report, with increase of 37% on Newly issued loans in 2024, compared to previous year and decrease by 7.1% of Non performing loans.
The Mongolian Stock Exchange (MSE) was established in 1991 in order to implement state privatization during the countrys transition to market economy from a planned economy. The secondary market trading started in 1995. MSE currently has 58 members, from whom 24 companies hold underwriting licenses. Main products are equities, government bonds and corporate bonds. Main market index is TOP-20, consisting of the top 20 companies by market capitalization and turnover. More information can be found here.
There were 386 listed companies under MSE as of September 2024 with the market capitalization of 1,840 million US$.
