The Development Bank of Mongolia plans to finance ₮2 trillion in projects this year, revises its strategy for 2030, aiming to increase its share to 12.8% of GDP. This ambitious plan seeks to grow the bank’s assets by $7 billion over the next 5 years, positioning it as a cornerstone of Mongolia's economic development.

🕵️‍♂️ 5 Main Directions of the Revised Strategy

In 2023, the Development Bank contributes 3.5% to GDP. To expand its influence, the strategy outlines five priorities: responsible governance, professional management, green financing, innovation, and supporting digital transition.

1️⃣ Balance Sheet Clean-up

The bank’s current assets total ₮2.4 trillion, with ₮2.3 trillion in outstanding loans, but 57.5% of these are non-performing, amounting to ₮1.7 trillion. To address this, the bank plans a ₮700 billion equity infusion, focusing on repaying state-related loans and stabilizing finances.

2️⃣ Political Influence and Financing Projects

Since its founding in 2011, the DBM has provided ₮7.6 trillion in loans, financing major projects like the oil refinery and Tavan Tolgoi power plant. However, political influence has historically hampered its efficiency, with shifting priorities and interference slowing project implementation and increasing non-performing loans. Past political entanglements have led to delayed projects and misaligned objectives, challenging the bank's ability to fulfill its core duties.

• Looking ahead, the DBM recognizes the necessity of reducing political interference to ensure that its projects align with Mongolia’s long-term economic goals. The bank is now pushing for legal reforms to enhance its autonomy and efficiency, aiming to transform into an Eximbank that focuses on export and import financing. This transformation will help the DBM navigate the political landscape more effectively, with a clearer mandate and greater resilience against external pressures.

Final Thoughts

While the DBM strives to reduce non-performing loans, political challenges persist. The bank’s success will depend on minimizing political interference, implementing necessary legal reforms, and improving operational efficiency. By strengthening its governance and focusing on strategic objectives, the DBM can fulfill its potential as a key driver of Mongolia’s economic growth and stability.