Khan Bank Syndication Loan (IFC-38121)

Regions
  • East Asia and Pacific
Geographic location where the impacts of the investment may be experienced.
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
Approved
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
May 31, 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
KHAN BANK LLC
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
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)
$ 40.00 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.
Project Cost (USD)
$ 100.00 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.
Primary Source

Original disclosure @ IFC website

Updated in EWS Jul 29, 2018

Disclosed by Bank Apr 13, 2016

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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.

The proposed investment is a syndicated senior loan of up to US$100 million to Khan Bank LLC, an IFC's existing client, to strengthen the Bank's capacity in supporting local micro and SMEs in Mongolia.

Expected Development Impacts
i. Access to finance: Given the Bank's strategic plan and its focus on small and medium sized enterprises (MSMEs), the project will support the Bank's lending to MSMEs and small projects.

ii. Funding structure improvement: This syndicated facility will provide medium to long term funding to the Bank, thereby extending its funding structure and improving its liquidity position.

iii. Access to international markets: The project represents IFC's continuous efforts to introduce leading Mongolian bank to global capital market.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

The Bank, established in 1991, is one of the oldest and largest commercial banks in Mongolia, with total assets of US$ 2.56 billion as of Dec 31, 2015. The bank was a market leader in total loans and customer deposits with 26.6% and 27.3% market share, respectively at the yearend 2015. Through its extensive service network of 545 branches and 583 ATMs, the bank services 2.3 million customers including 388,000 borrowers throughout the country. Khan Bank is rated by Moody’s (B2) and Fitch Ratings (B).

Khan Bank is directly and indirectly owned by Sawada Holdings Co. Ltd (54.4%), a public company listed on Tokyo Stock Exchange. Tavan Bogd Trade Co. Ltd, one of the largest private conglomerates in Mongolia, owns 22.9% and International Finance Corporation (IFC) owns 9.3% of the Bank. Ms. Khulan. D, a Mongolian citizen, owns the remaining 13.3% of the Bank.

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.

The Bank, established in 1991, is one of the oldest and largest commercial banks in Mongolia, with total assets of US$ 2.56 billion as of Dec 31, 2015. The bank was a market leader in total loans and customer deposits with 26.6% and 27.3% market share, respectively at the yearend 2015. Through its extensive service network of 545 branches and 583 ATMs, the bank services 2.3 million customers including 388,000 borrowers throughout the country. Khan Bank is rated by Moody’s (B2) and Fitch Ratings (B).

Khan Bank is directly and indirectly owned by Sawada Holdings Co. Ltd (54.4%), a public company listed on Tokyo Stock Exchange. Tavan Bogd Trade Co. Ltd, one of the largest private conglomerates in Mongolia, owns 22.9% and International Finance Corporation (IFC) owns 9.3% of the Bank. Ms. Khulan. D, a Mongolian citizen, owns the remaining 13.3% of the Bank.


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.

Investment Banking Department, Khan Bank
Seoul Street-25, PO Box-192
Ulaanbaatar-14250, Mongolia
Email Address: investmentbank@khanbank.com
Telephone No.: +976 11 332333
Fax No.: +976 7011 7023

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/

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