Development Bank of Mongolia’s capital to increase
The Parliament and the Government approved a resolution to increase Development Bank of Mongolia’s (DBM) capital by some 400 million USD and to transfer loan portfolios that will be repaid from the St
Development Bank of Mongolia’s capital is to increase. The Parliament and the Government approved a resolution to increase Development Bank of Mongolia’s (DBM) capital by some 400 million USD and to transfer loan portfolios that will be repaid from the State budget to the Ministry of Finance. Since its inception, DBM has extended more than fifty percent of its loans to projects that have no revenue generating abilities. These projects include roads, bridges, and utilities, and their repayments were guaranteed by the State Budget. Many criticized DBM’s business model and past practices of financing a budget-related expenditure instead of focusing on large-scale development projects that actually produce revenue. This resolution will allow DBM to grow as a classic development financial institution with strong financial foundation that focuses on commercially viable projects in energy, mining, transportation, and manufacturing sectors.
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