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Proparco and XacBank strengthen climate, gender and SME finance in Mongolia
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On the sidelines of UNCCD COP17 in Ulaantaatar, Proparco has granted a USD 40 million senior credit line to XacBank, one of the Mongolia’s leading sustainable banks.
The financing combines three strategic priorities: accelerating Mongolia’s green transition (30% of the funds), promoting women in business (40% of the funds), and strengthening the country’s entrepreneurial ecosystem (30%).
The operation builds on the longstanding relationship between Proparco and XacBank and will help meet the growing demand for long-term financing to support investment and business development in Mongolia. By providing additional long-term resources, the facility will enable XacBank to support businesses in their investment and development plans, while contributing to the diversification of Mongolia’s economy.
Scaling up green finance
A pioneer in sustainable banking in Mongolia, XacBank established its Eco Banking department in 2009. The climate component will support the continued expansion of XacBank’s green finance portfolio.
Eligible investments will primarily include energy-efficiency measures, green buildings, renewable energy and low-carbon transport. Particular attention will be given to climate adaptation and biodiversity-related projects, positioning XacBank among the first banks in Mongolia to develop a dedicated adaptation finance portfolio. These investments will notably support the water and sanitation sectors, where modernisation and climate resilience are essential to the country’s sustainable development, as highlighted during UNCCD COP17.
The facility will contribute to Mongolia’s national objectives for the development of green finance while helping local businesses invest in more sustainable and resilient economic models.
Expanding finance for women-led businesses
Forty percent of the credit line will be dedicated to businesses owned or led by women in accordance with the internationally recognized criteria of the 2X Challenge.
Women entrepreneurs continue to face significant barriers when seeking finance, particularly long-term funding suited to the development of their businesses.
XacBank has developed a dedicated offering for women entrepreneurs, including preferential financing conditions.
The new facility will allow the bank to scale up this activity and reinforce its broader commitment to gender equality, including through women’s representation in governance and equal opportunities within the institution.
Improving access to finance for SMEs
The remaining thirty percent of the financing will support Mongolian SMEs, which play a central role in employment and private-sector development but continue to face a substantial financing gap.
Access to additional long-term resources will enable SMEs to invest in their operations, increase productivity and pursue their development plans.
Supporting this segment is particularly important in a country with a young population and a need to generate new employment opportunities outside the mining industry. The facility will therefore contribute to economic diversification, job creation and the development of a stronger local private sector.
Overall, the facility brings together Proparco and XacBank’s shared priorities by supporting green investment, women-led businesses and SMEs, while contributing to a more diversified and resilient Mongolian economy.