REACH Project - Small and Medium Enterprise Access to Credit

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REACH Project – Small and Medium Enterprise Access to Credit
Indicative map shows the extent of USAID assistance for SMEs in Mongolia covering Ulaanbaatar city and Bayan-Olgii, Dundgovi, Selenge and Dornod provinces.

Mongolia has experienced unprecedented growth over the last decade due to a robust mining sector, which is dominated by large firms. The country enjoyed over 17 percent Gross Domestic Product (GDP) growth in 2011 and around 12 percent in 2012 and 2013. However, these gains have slowed to a GDP growth of only 2.4 percent in 2015 and negative growth predicted in 2016.

For long-term economic stability, Mongolia recognizes that it must support the growth of SMEs – which are the engines of growth in free market economies across the globe, and key to reducing its heavy reliance on the extractive industries.

The Government of Mongolia created the Credit Guarantee Fund in 2012 to improve access to credit for SMEs; however, the majority of the loan applicants failed due to insufficient collateral, lack of financial education, and unacceptable business plans.

USAID supports Mongolia to achieve financial literacy and inclusion by helping its SMEs qualify for loan requirements and increase their credit access and loan value. Improving SME access to credit will lead to stronger and sustainable business, contribute to stable economic growth, and improve the quality of life in Mongolia.


  • Facilitate the awarding of 500 hundred loans worth 25 million USD to SMEs with improved borrowing capacity
  • Launch operations centers in five target areas to identify SMEs credit access needs
  • Implement effective public dissemination of information
  • Achieve financial inclusion for SMEs through behavioral changes and improved financial literacy.


Ulaanbaatar is Mongolia’s hub of economic and development activity where nearly 80 percent of the country’s businesses are registered.

Bayan-Olgii aimag is one of the least-developed and most remote aimags in Mongolia, located 1,686 km from Ulaanbaatar and with a population consisting primarily of the Kazakh minority.

Selenge aimag is situated next to the Russian border and is home to Darkhan, the second largest and second most developed city in Mongolia.

Dornod aimag is the easternmost aimag of Mongolia and shares borders with Russia and China. The aimag’s population contains a variety of ethnicities where nearly 70 percent are aged 35 and under.

Dungovi’s economic performance and business efficiency has been at the lowest-ever position for the last three years due to lack of business development support. There has been business growth in livestock and agriculture, tourism and service-related industries.

The activity will serve legal SMEs from these five target areas with the following eligibility criteria:

  • Intention to seek a loan
  • Substantial number of years of business operations
  • Financial Services Institution and/or Credit Guarantee Fund requirements for minimal collateral
  • Reliable financial records and history
  • Demonstrated need for financial and technical support


Improve and scale access to credit for underserved small and medium enterprises (SMEs) in five target areas in Mongolia.


  • Strengthen SMEs’ capacity to qualify for loan requirements
  • Facilitate SME loan value through forging partnerships


This activity targets underserved SMEs in Ulaanbaatar city, Dundgovi, Selenge, Bayan-Olgil and Dornod aimags (provinces).

Last updated: November 09, 2016

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