USAID partners with Mongolian Mortgage Corporation to develop Mongolia’s housing finance sector
September 29, 2011
Ulaanbaatar, September 29, 2011 - The U.S. Agency for International Development (USAID) and Mongolian Mortgage Corporation (MIK) announced today a new collaboration that will increase the availability of long-term housing finance in Mongolia. USAID is assisting MIK in developing a secondary mortgage market with a partial guarantee that will provide credit enhancement to make MIK’s bonds more attractive to investors. Through the bond sales, USAID expects MIK will improve the liquidity and affordability of mortgage loans and stimulate private sector lending for housing finance.
The guarantee facility will cover approximately $4 million in mortgage backed bonds, of which 50 percent is guaranteed by the U.S. Treasury. “With the guarantee, we expect to deepen the nascent Mongolian capital markets and increase access to finance for low to middle-income housing,” said USAID/Mongolia’s Mission Director Chuck Howell. “The guarantee provides significant support for the development of the Mongolian mortgage market, and invites domestic and foreign investors to invest in our capital market, specifically by improving risk profile of Mongolian asset-backed securities” said CEO of MIK Enkhbayar.Ts. USAID’s Development Credit Authority works with financial institutions to open up existing sources of local finance that can be used to invest in underserved markets to achieve development results.
For more information about USAID, visit www.usaid.gov.