MINISTRY OF FOOD, AGRICULTURE

AND LIGHT INDUSTRY

The views expressed in this presentation are
the views of the author and do not
necessarily reflect the views or policies of
the Asian Development Bank Institute
(ADBI), the Asian Development Bank (ADB),
its Board of Directors, or the governments
they represent. ADBI does not guarantee the
accuracy of the data included in this paper
and accepts no responsibility for any
consequences of their use. Terminology used
may not necessarily be consistent with ADB
official terms.

SMEs
development in
Mongolia

 Population: 3 million people.

by Russia to the north
and China to the south,
east and west.
Language: MTerritory: 1,565,000 square
kilometres.
Located in Central Asia.
It is bordered ongolian
Religion: Buddhist 53%, Muslim 3%, Christian
2.2%, Shamanist 2.9%, other 0.4%, none
38.6%
Life expectancy: 62 years for men, 67 years for
women

2011

2012

2013

2014

2015

2.8

2.8

2.9

2.9

3.0

3,783

4,377

4,598

4,166

3,971

GDP (USD bn)

10.5

12.4

13.3

12.2

11.8

Economic Growth (GDP, annual

variation in %)

17.5

12.5

11.6

8.1

2.4

7.7

8.2

7.9

7.9

7.5

Fiscal Balance (% of GDP)

-5.8

-6.8

-1.2

-3.7

Public Debt (% of GDP)

32.7

51.3

67.3

76.5

Money (annual variation in %)

37.0

18.8

24.1

12.5

-5.5

9.2

14.3

10.5

12.8

6.6

Population (million)
GDP per capita (USD)

Unemployment Rate

Inflation Rate (CPI, annual variation in

%)

Trade of Mongolia - Foreign trade turnover of Mongolia

120.0%

14,000.0
106.2%

12,000.0

4,000.0

11,011.2
4,269.1
6,357.8

4,384.7
6,738.4

4,817.5
6,598.4

6,108.6

6,000.0

80.0%

60.0%

5,774.6
5,236.6

65.6%

8,000.0

35.3%

19.8%

537.9

2,908.5
3,200.1

EXPORTS

2012

2013

-9.0%

3.6%

-17.6%

IMPORTS

0.0%

2014

(2,088.8)

TURNOVER

2011

(2,353.7)

(4,000.0)

2010

(1,780.9)

(2,000.0)

2005

2.1%

(291.6)

2000

40.0%

20.0%

[VALUE]

(113.4)

18.0%

2,241.2
1,063.9
1,177.3

0.0

19.0%

(78.7)

2,000.0

1,150.3
535.8
614.5

million $ dollar

10,626.9

10,000.0

86.9%

11,123.1

11,415.9

100.0%

BALANCE

-20.0%

-40.0%

Foreign trade turnover of Mongolia

Japan
3.6%

2014

2015

Total export

2480846.0

2370178.0

Mining

2063951.0

1904914.0

221068.4

167480.8

Metals

89850.7

158141.9

Leather products

22760.8

18113.0

4985.6

12336.4

Wool and cashmere products

Food products

10

ANNUALLY, 10 MILLION HEAD OF LIVESTOCK IS

SUPPLIES TO THE MARKET

11

CURRENT SITUATION AND FUTURE OPPORTUNITIES FOR

ANIMAL HUSBANDRY PRODUCTION BUSINESS

30 000 000 000 USD

12

12

13

14

Registered
enterprises

Active

By %

1-9 employees

90.270

46.347

51

10-19

4.300

3.789

88

20-49

3.192

2.990

94

More than 50

1.841

1.803

98

Total

99.603

54.929

55

 Total private 99603. Of which:

Active private 54929

Active SME 47925 in 15 business sector (38.7%)

In the informal sector 171.1 thousands household of herdsmen , 179.5

thousands individuals running own business. It is 18% of economically active
population
Employment 70%
Export - 5%

Sector

1-9

10-19

20-49

50 +

Total

Agriculture, livestock

3471

300

78

13

3862

Manufacturing

3820

280

144

120

3364

Electricity, thermal energy and water supply

89

46

22

52

209

Construction

550

212

207

95

1064

Whole and retail trade

24063

388

160

80

24691

Others

9859

701

352

161

11073

Total

41381

1627

885

508

47925

Source: National Statistical Office of Mongolia

16

1. Law on small and medium enterprises - planning to renew in

2017
2. Law on financial leasing -2008
3. Law of loan guarantee fund -2012
4. The programm for support of small and medium enterprises
changed in 2009, 2012
5. The programm for Industralization anewed in 2009
6. Guideline to develop manufacturing in rural areas anewed in
2009
7. State policy on industry -2015
8. Government program 2016-2020
17

State Policy: Industrial Sector

State Policy on Industry approved by the State Great Khural (Parliament) of Mongolia
(June 19, 2015)

Objectives:
1.

2.

To improve domestic supply and increase export-oriented manufacturing with the promotion of
a)
Oil refineries, coal-chemical plants, cokechemical plants, copper smelting, metallurgy and metal processing
plants, and manufacturing of machinery and equipment
b)
Wool, cashmere and leather processing and production of finished products
To establish agricultural and technological parks and to develop manufacturing of ecologically clean products that
meet international standards

1.

To develop clusters in the following sectors:

a)
Meat
b)
Wool and cashmere
c)
Seabuckthorn
d)
Leather
e)
Textile
f)
Tourism
g)
Services for mining
h)
IT, high technology and innovation

4.

Industrial parks planned to be built in the following sectors:

a)
Agricultural and mining sectors /closer to the local resources/
b)
Machinery and equipments

5.

Incentives for industrial parks:

a)
income taxes
b)
immoveable property taxes
c)
land payments

18

Investment in Industrial Sector of Mongolia

Economic Partnership Agreement between Mongolia and Japan

Tariff reduction
Investment treatment (eg: exemption from any rate or amount of royalty under a license
contract and any duration of the term of a license contract")
Contract-based professional workers

Duty-free access to the EU market (7200 items)

Free zones
a)
Possible to invest in all sectors such as manufacturing, services, tourism, trade, banking
and finance, amusement, casino
b)
Exemption from customs duty, income tax and VAT
c)
Exemption from land fee in the first 5 years

Rich in agricultural and natural resources

tax holidays and exemptions such as VAT if the products are manufactured and exported
Inexpensive workforce
Ecologically clean raw materials
Inexpensive energy sources
Close to large markets of China and Russia (geographical, political and economic
advantages)

19

Overall Objective:
Enhancing the competitiveness of small and medium
enterprises and increasing employment
Six Key Specific Objectives:

Enhancement of legal environment to fill gaps and remove barriers

Cluster development to boost industry
Research refinement and innovation development
Capacity building for SMEs to increase competitiveness
Increase resources and access to financing
Support market development through more and better quality of
goods

NON FINANCIAL

FINANCIAL

BUSINESS INCUBATION

SOFT LOAN SMED FUND

TRAINING

LOAN GUARANTEE- LOAN

GUARANTEE FUND

EXPAND MARKET EXPOPROCUREMENT

LEASING EQUIPMENT

TAX FREE FOR SME EQUIPMENT

BUSINESS ADVISORY

Improving database of SMEs

TAX concessions
Increasing financial resources
Supply chain
Promotion of cluster development
Identifying and promotion of national brand products
Standardize the training
Establish consultancy service before and after allocation of the
discounted loan
Improving the procedure of discounted loan from SME
Development Fund
+
+
+

Simplifying the process

Renewing selection criteria
Improving monitoring and transparency

 Proactive policies need to promote business environments

make SMEs more attractive and competitive for global value chains
facilitate upgrading opportunities so as to overcome their participation
constraints.
seek to make market entry easy,
enhance peoples education and skills,
assist with accessing finance and investment in knowledge-based assets.
In addition, open, transparent and predictable investment policies that
lower investment barriers, promote foreign direct investments and
strengthen the linkages with the domestic economy are needed for SMEs
to benefit from global value chains.
And since the engagement in value chains depends on the ease, cost, and
reliability of international trade flows while goods and services cross
borders multiple times, trade barriers need to be minimized.

THANK YOU FOR YOUR

KIND ATTENTION

Web: SME.GOV.MN
24