BAKU, Azerbaijan, November 12. The European Bank for Reconstruction and Development (EBRD) is providing up to $20 million (16.8 million euros) to Khan Bank, Mongolia’s private lender, to support micro, small, and medium-sized enterprises (MSMEs) in the agricultural sector, Trend reports via the bank.
The financing will allow Khan Bank to expand lending to rural agribusinesses, enhance climate-risk management, and promote green investments among small domestic firms. At least 15% of the funds are expected to support environmentally sustainable projects that improve climate resilience and mitigate the effects of climate change on local agribusinesses.
This marks the EBRD’s first financing facility in Mongolia and Central Asia specifically dedicated to agribusiness, aiming to scale up climate-smart financing and increase access to finance for underserved rural businesses. The project also supports Mongolia’s national sustainable-finance roadmap.
Agriculture accounts for more than 7% of Mongolia’s GDP and employs a large portion of the rural population. The sector faces challenges from extreme weather, pasture degradation, outdated infrastructure, and weak logistics. The new funds and advanced financial products will help herders and small processing companies in remote areas become more resilient.
The project will also benefit from technical assistance through the EBRD’s Advice for Small Businesses programme, which is financially supported by the European Union.
To date, the EBRD has invested almost 2.55 billion euros in Mongolia across 160 projects, with around 90% of the funding supporting private-sector companies.