Xac Syndication (IFC-37610)

Countries
  • Mongolia
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • International Finance Corporation (IFC)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Active
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
FI
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Mar 1, 2016
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
XACBANK LTD.
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
  • Industry and Trade
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 105.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Currency conversion note:
Bank reported
Converted using 2016-03-01 exchange rate.
Project Cost (USD)
$ 105.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Currency conversion note:
Bank reported
Converted using 2016-03-01 exchange rate.
Primary Source

Original disclosure @ IFC website

Updated in EWS Aug 1, 2018

Disclosed by Bank Dec 4, 2015

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

This project provides funds to XacBank LLC, the fourth largest bank in Mongolia. The bank will use the funds to make loans to small and medium sized firms, thereby increasing access to capital for Mongolian firms.

People Affected By This Project
People Affected By This Project refers to the communities of people likely to be affected positively or negatively by a project.

1. Access to finance: the project will expand the access to finance for the MSME sector. Given the Company''s strategic plan and its focus in MSME sector, the syndicated facility is expected to support 9,000~11,000 MSME loans per year
2. Improve funding structure: the investment will provide mid to long term funding to an important IFC client, thereby improving its liability structure and strengthening its resilience to adverse liquidity events
3. Access to international markets: the project represents IFC''s continuous efforts to introduce leading Mongolian bank to global capital market and it will create a demonstration effect for other Mongolian entities to attract and use international capital.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.
Financial Intermediary
A financial intermediary is a bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.
Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

XacBank originated in 1998 as a microfinance project sponsored by the United Nations Development Program and the United States Agency for International Development, transformed into a bank in 2001, and is currently the fourth largest bank in Mongolia in terms of outstanding loans. By June 2015, the Bank had 90 branches and 1,477 staff, served over 460,000 active depositors and over 100,000 active borrowers, and had total assets of MNT1,884 billion (US$950 million equivalent) and gross outstanding loans of MNT1,289 billion (US$650 million equivalent). IFC started partnership with XacBank in 1999 by providing advisory services to assist its transformation into a bank, and provided it a few senior loans and subordinated debts in the past ten years to support its business growth.

XacBank is wholly owned by Tenger Financial Group (“TFG”), a Mongolian financial service holding company offering banking, leasing, insurance and micro credit services through its subsidiaries. XacBank is its primary subsidiary and represents over 90% of its total assets. Other major subsidiaries include (i) XacLeasing, the first independent leasing company in Mongolia; (ii) Xinjiang Urumqi Tianrong Micro Credit Co., Ltd (“Xinjiang MCC”), a micro credit company based in western China, in which IFC is a shareholder with a 10% stake; (iii) Tenger Insurance, a general insurance company; and (iv) Tenger Capital, providing brokerage and financial advisory service.


Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

Mr. Bold Magvan
Address:
XacBank LLC
International Commercial Center, Jamiyan Gun st-9,
Post Branch No.20A, P.O.Box-72
Ulaanbaatar-14210 Mongolia
Email: mailto:erdenebayar.g@xacbank.mn; mailto:bold.m@tengerfg.mn
Telephone: +976 99115048
Website: http://www.xacbank.mn
Telephone: +976 99115048

XacBank LLC
International Commercial Center, Jamiyan Gun st-9,
Post Branch No.20A, P.O.Box-72
Ulaanbaatar-14210 Mongolia

ACCOUNTABILITY MECHANISM OF IFC

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/

How it works

How it works