Khan Bank Raises USD 172 Million in Long-Term Funding from International DFIs

Khan bank JSC (MSE: KHAN) has secured a US$172 million, five-year syndicated loan from a group of international development finance institutions and impact funds, led by the Dutch development bank FMO. Participants include the Danish development finance institution IFDK, Finland’s Finnfund, BlueOrchard Microfinance Fund and ILX Funds. The facility will support green lending and Mongolia’s micro, small and medium-sized businesses.

Deal Terms

The facility combines MNT and USD tranches. Of the total, US$80 million is provided by FMO, Khan Bank’s partner since 2009, in Mongolian tugrug. 30% of the proceeds will fund green loans and projects, while 70% will support women and young entrepreneurs, regional businesses and the agricultural sector. The deal is aligned with the 2X Challenge, with at least 30% of the funding from FMO, Finnfund, BlueOrchard and ILX earmarked for women-owned or women-led businesses. IFDK, lending to Khan Bank for the first time, will direct its entire participation to green finance.

Why It Matters

Local currency funding. Nearly half the facility is denominated in tugrug, which is rare for international lending into Mongolia. It allows Khan Bank to offer long-term MNT loans to small businesses and farmers without passing currency risk onto borrowers whose income is in tugrug.

Scale and syndication. At US$172 million across five lenders, this is one of the larger DFI facilities for a Mongolian bank, and the syndicated structure brings new names such as IFDK onto Khan Bank’s lender base.

A track record in sustainable finance. Khan Bank launched its first green loan product in 2015 and issued Mongolia’s first green bond in 2023 and first social bond in 2024. It targets green loans at 10% and gender finance at 15% of its total loan book by end-2026.

Part of a wider trend. The deal follows FinDev Canada’s US$50 million loan to Golomt Bank earlier this month, with a similar split of 70% for MSMEs and 30% for climate and nature. Together, they show growing appetite among development lenders for Mongolia’s leading banks as channels for inclusive and green finance.

What to Watch

Key indicators will be Khan Bank’s progress toward its end-2026 green and gender lending targets, the take-up of tugrug-denominated long-term loans in rural regions, and whether other Mongolian banks secure similar local currency facilities.