The development impact value proposition of this transaction is to contribute to sustainable, inclusive economic growth and development in Mongolia by improving access to finance for MSMEs, including women‑owned/led enterprises, as well as climate mitigation and adaptation projects. The impact theory of change below summarizes how Khan Bank will contribute to FinDev Canada’s long‑term development impact goals and the Sustainable Development Goals.

MARKET DEVELOPMENT

• Improve access to finance for MSMEs: Despite representing 77% of registered businesses, contributing to 18% of GDP and providing 70% of employment in Mongolia¹, MSMEs face a significant financing gap of $1.27B, equivalent to 9.8% of GDP². Through Khan Bank’s comprehensive range of financial products and services, the Bank is well positioned to support Mongolia’s MSMEs through its nationwide network of branches and its dedicated financial products. To contribute to closing the financing gap, 40% of FinDev Canada’s proceeds will support Khan Bank’s MSME clients.

GENDER EQUALITY

• Improve access to finance for WMSMEs: WMSMEs represent 40% of Mongolia’s entrepreneurial landscape³, however, they face significant barriers in accessing finance compared to their male peers, ranging from stringent collateral requirements to elevated interest rates⁴. With a gender loan portfolio of $475.8M as of 1H2025, Khan Bank has a track record in supporting WMSMEs. The Bank offers gender‑focused financial products and services such as interest rate waivers and flexible collateral requirements, alongside non‑financial support including the Women Entrepreneurship Program.
• 2X‑qualification: This transaction is 2X qualified under the Employment and the Portfolio criteria. Women’s representation in the Bank’s workforce is above the 45% 2X threshold and as part of this transaction, 30% of FinDev Canada’s proceeds will be earmarked for the Bank’s lending to WMSMEs.

CLIMATE AND NATURE ACTION

• Support climate mitigation and adaptation activities: To fulfil its NDC commitments, Mongolia requires an estimated $6.3B for climate mitigation, and $5.2B for adaptation by 2030⁵. Khan Bank is leading the way in advancing green finance in Mongolia, with the Bank holding a majority of the country’s green market share. Khan Bank has a green loan portfolio of $290.4M as of 1H2025 and provides a range of climate mitigation and adaptation loan products to its clients. This transaction will allocate 30% of FinDev Canada’s proceeds to climate finance eligible activities in the Bank’s portfolio.

¹ Asian Development Bank, 2023. Rebuilding Micro, Small, and Medium-Sized Enterprises Post-COVID-19 in Mongolia (ADB Brief 266)
² SME Finance Forum, 2019. MSME Finance Gap | SME Finance Forum
³ SME Finance Forum, 2019. MSME Finance Gap | SME Finance Forum
⁴ IFC, 2025. Investing in Mongolia’s Women Entrepreneurs
⁵ UNFCCC, 2020. First Submission of Mongolia’s NDC.pdf