Draft:Khan Bank
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| |
 Headquarters in Ulaanbaatar | |
Native name | ХААН Банк |
|---|---|
| Formerly | Agricultural Bank of Mongolia |
| Company type | Public company |
| Industry | Financial services |
| Headquarters | , |
Number of locations | 528 branches |
Area served | Mongolia |
Key people | Munkhtuya Rentsenbat (CEO) |
| Products | Banking services |
Number of employees | 6,300 (2024) |
| Website | www |
Khan Bank (Mongolian: ХААН Банк) is a Mongolian bank that is one of the largest commercial banks in Mongolia.[1]
As of 2024[update], the bank had 528 branches and 335 ATMs throughout Mongolia.[2] The Bank has the largest total assets in Mongolia, making it a key player in Mongolian finance sector.[3][2]
The bank is one of the countries major providers of microfinance. It has a large focus on clients that are herdsman with solely movable assets.
History
[edit]Khan Bank was established in 1991 as the Agricultural Bank of Mongolia and was owned by herdsman and farmers until in 2003 where it privatized and renamed as Khan Bank.[2] From the assets of the former state bank, the agricultural bank was established to serve the agriculture and livestock sectors.
Khan Bank went into crisis in 1996-1999 as corruption and mismanagement impaired its liquidity and financial position and eventually lead to the Government of Mongolia and the Central Bank reinvested jointly in and privatizing the institution towards the 2000s.[4]
In 2000, Agriculture Bank of Mongolia was staring at a potential failure but with a help from DAI Global and the World Bank's help, The Bank was able to do a complete turnaround and spread financial coverage to rural parts of Mongolia expanding to 500 branches. By 2003, Khan Bank served over 80% of all Mongolian households.[5]
Khan Bank reaches 98 percent of rural communities, and massively expanded deposit, loan, and other service offerings to clients, including pensioners, nomadic herders, and small enterprises. For the price of a two-year, $2.5 million management contract, the United States Agency for International Development (USAID) turned Khan bank into a $125 million enterprise that has become fundamental to Mongolia’s economic and social infrastructure.[5]
Khan Bank considered an IPO in 2008, but because of the events of the global financial crisis those plans were put on hold.[6]
As of 2008 the biggest 5 banks controlled 78.5% of total bank assets of Mongolia and the largest 3 holding 60.1% of total, one of them being Khan Bank.[7] 2009 saw small GDP growth in Mongolia of only 0.5% which caused low money supply and impact on loan repayments. The banks performance was overly impacted as there was an increase in non-performing loans (NPLs). NPLs increased by as much as 50%.[3]
In 2012, Mongolia faced immense economic growth which caused a liquidation issue in local banks, including Khan Bank, where banks sought foreign capital to satisfy the demand.[6]
In 2023 Khan Bank earned the bank of the year award alongside banks from 130 countries around the world.[8][9]
Microfinance
[edit]
Khan bank together with XacBank are the two main banks that are involved in Micro-financing in Mongolia. Khan Bank is a large player in the Mongolian micro-financing programs with many of the rural communities depending on the loans and programs from Khan Bank.
As of 2011[update], the average annual growth rates of the number of borrowers for Khan Bank was 21 percent average loan size also increased by 36.7 percent for Khan Bank. Herders made up a significant portion of borrows and 2/3rd of the surveyed borrowers live in a ger, a traditional Mongolian dwelling.[4] Of the 15 commercial banks in Mongolia that are operating, only three banks, Khan, XacBank and Mongol Post banks have a wider network of rural branches.[7]
Despite the borrowers mostly being herders, use of immovable as well as movable assets being used for loans has caused issues as herders can use livestock, gers, motorcycles and even their own relatives assets to secure loans further exasperating the inequality between Mongolia's urban wealth and rural settlements.[4] Despite Khan Bank's over involvement in rural areas, Khan Bank has three times the interest for loans compared with other competitors.[7]
Sustainability
[edit]MicroVest invested $10 million in Mongolia’s first ever green bond to support the Mongolia's green developments. MicroVest, the asset management arm of DAI Capital, subscribed as the sole private institutional investor in a $60 million five-year bond, also supported by a $15 million contribution from the World Bank’s International Finance Corporation (IFC) and $35 million from FMO, the Dutch development finance institution.[10]
Asian Development Bank has worked with Khan Bank to further gender equality in Mongolia. Khan Bank has more than half of the employees are women and has a gender action committee to support women led households in Mongolia and reach women entrepreneurs and workers[11]. There are trainings, financial literacy initiatives and targeted marketing for gender equality[11]. Female employees make up a staggering 66% of the company and on average over 600 employees were on maternity leave during one year.[12]
See Also
[edit]References
[edit]- ^ "Khan Bank – Communication on Progress | UN Global Compact". unglobalcompact.org. Retrieved 2024-02-03.
- ^ a b c "Khan Bank for Supporting Micro, Small and Medium-Sized Enterprises in Mongolia". Asian Development Bank. Retrieved 2024-02-03.
- ^ a b Ganbaatar, Tsend-Ayush; Oyun-Erdene, Selenge (2012). "Bank specific credit stress testing: A case of Mongolia". Procedia Economics and Finance. 1 (1): 148–157. doi:10.1016/S2212-5671(12)00018-4.
- ^ a b c Dulamragchaa, Orosoo; Izumida, Yoichi (2011). "Progress of Mongolian Microfinance: A Case Study of Khan Bank and XacBank". Asian Journal of Agriculture and Development. 8 (2): 29–41. doi:10.37801/ajad2011.8.2.3. S2CID 59364196 – via Google Scholar.
- ^ a b "Mongolia—Khan Bank: Bank Management Support · DAI: International Development". www.dai.com. Retrieved 2024-02-03.
- ^ a b "Banks race to keep pace with Mongolia's growth". www.thebanker.com. Retrieved 2024-02-03.
- ^ a b c Chuluunbaatar, Tumunjargal (2010). "Bank profitability in Mongolia". Charles University in Prague: Institute of Economic Studies – via Google Scholar.
- ^ gogo.mn. "Khan Bank receives The Bank of the Year Mongolia Award for the 9th time". gogo.mn. Retrieved 2024-02-03.
- ^ "Awards for Excellence country winners: Mongolia". Euromoney. July 19, 2024.
- ^ "MicroVest's Investment in Mongolia's First Green Bond Brings DAI Engagement Full Circle · DAI Publications". dai-global-developments.com. 2023-09-01. Retrieved 2024-02-03.
- ^ a b "MONGOLIA: Khan Bank Green Bond Investment Project" (PDF). Preliminary Poverty and Social Analysis: 5. October 2023 – via Asian Development Bank.
- ^ "Khan Bank – Communication on Progress | UN Global Compact". unglobalcompact.org. Retrieved 2024-02-03.