XacBank, a limited liability commercial bank licensed by the Bank of Mongolia (the Central Bank), is the second largest bank in the country in terms of outreach. Its mission is to contribute to the socio-economic development of the country by providing access to comprehensive financial services to all citizens and legal entities, including those who are normally excluded, such as low-income and remote rural households.
XacBank offers 17 loan products including.
- Start Up Loan: A loan (up to $1,710) available to new businesses for start-up working capital and capital expenditure.
- Growth Loan: A loan ($1,711-6,835$) available to existing businesses for growth oriented expansion.
- SME Loan: A loan (over $6,836) available for business working capital and capital expenditure.
- Herder Group Loan: A loan ($425-$8,545) available for livestock breeding and consumption.
- Wholesale Loan: A loan (up to 80% of equity; minimum loan size $500) given to lenders for on-lending.
- Household Loan: A loan (up to $2,565) available for household consumption.
- Leasing: A loan (Individual $1,800; business $27,000) for financing leasing of equipment, appliances, etc.
- Agriculture Loan: A loan (up to $27,000) available for agricultural working capital.
- Salary Based Loan: A loan (up to 7 times net salary) available for consumption.
- Mortgage loan: A loan (up to $ 30,000) available for housing purchase.
In addition to loan products, XacBank offers 7 deposit/savings products, tailored to meet identified market segments. XacBank also provides domestic and international payment and transfer services. Loan and deposit services are available in Tugrug (MNT),, US dollar, RUB and CNY. In 2005, XacBank started to issue XacMaster Card payment cards and card holder numbers reached 15,000.
XacBank has at least one branch in every province of Mongolia. Borrowers engaged in small or informal businesses comprise 27.6% of total borrowers, SMEs 8.6%, salaried people 55.3% and 7.6% are herders. The remaining 3.3% are deposit-backed loans. XacBank's strategic focus has been on rural markets, where its 21 branches service rural borrowers comprising now 68.3% of all borrowers. XAC aims to further assist peri-urban residents, nomadic herders and small farmers by offering greater range of products. TA, which establishes savings and credit cooperatives, is a new initiative created for remote clients. These franchisee cooperatives, now numbering 76, become XacBank's outreach partners.
Aside from earning a sustainable profit, XacBank has expanded its outreach to 56 percent of citizens of Mongolia. Since its incorporation and licensing, the Bank has enjoyed a rapid growth and currently has a loan portfolio of US$ 40.4 million, with US$ 33 million total savings mobilized. Furthermore, XacBank expanded its product base in FY 2004 by introducing loan products that allow real estate, herder loans, and crop loans to be collateralized.
After D. Hureltogoo lost his job in 2002, he and his wife set up the Shine Burd (New Oasis) Ltd. Company for production of ger and ger furniture. Since then he has been gradually increasing revolving capital and expanding production capacity to meet market demand. From 2001 to now he has taken nine business loans with XAC Bank to finance the expansion of his business. The fact that last year he became the highest selling participant of a fair held in Umnugobi aimag speaks for the quality of his produce. Full Story