The European Bank for Reconstruction and Development (EBRD) has announced a loan of up to US$ 20 million (€16.8 million) to Khan Bank, Mongolia’s largest private financial institution, aimed at supporting micro, small and medium-sized enterprises (MSMEs) in the country’s agricultural sector. The initiative seeks to strengthen the resilience of Mongolia’s agribusinesses, enhance food security, and promote sustainable growth across rural communities.
Through this loan, Khan Bank will expand its lending to rural MSMEs, helping improve climate-risk management and promote environmentally friendly investments. At least 15 per cent of the funds will support green projects in agriculture, focusing on climate-change mitigation and boosting the climate resilience of local agribusinesses.
This financing marks the EBRD’s first agribusiness-specific facility in Mongolia and Central Asia. By partnering with the EBRD, Khan Bank will scale up climate-smart financing and increase access to credit for underserved rural enterprises. The project will also align with Mongolia’s national sustainable finance roadmap, supporting the country’s transition toward a greener economy.
Agriculture remains a crucial part of Mongolia’s economy, accounting for more than 7 per cent of GDP and employing a large portion of the rural population. However, the sector faces challenges such as extreme weather, pasture degradation, poor infrastructure, and limited logistics. The EBRD’s investment will help rural herders and small processing businesses overcome these barriers and build long-term resilience.
Additionally, the project will benefit from technical assistance provided through the EBRD’s Advice for Small Businesses programme, co-financed by the European Union, which offers expert guidance and capacity-building support. To date, the EBRD has invested nearly €2.55 billion in Mongolia across 160 projects, with approximately 90 per cent of funding directed toward private-sector development.
