XacBank's Sustainable Banking Approach Explained

XacBank prioritizes environmentally friendly practices in its operations, such as using solar power to reduce its carbon footprint.

The bank's commitment to sustainability is evident in its efforts to reduce paper waste, for example by using digital platforms for customer transactions.

XacBank also focuses on supporting local communities through its community development programs.

These initiatives demonstrate the bank's dedication to creating a positive impact on the environment and society.

Our funding objective is to support the growth of XacBank's SME portfolio. This will enable the bank to expand its services to more small and medium-sized enterprises.

The loan will specifically fund green lending and loans to women-owned SMEs. This is a targeted approach to promoting sustainable development and empowering female entrepreneurs.

By earmarking proceeds for these specific purposes, XacBank aims to make a positive impact in the community.

XacBank's investment strategy is clearly focused on providing significant funding to various projects. They have made substantial investments over the years, with the largest being USD 65.00 MLN in December 2019.

Their investment amounts have varied greatly, with some months seeing larger investments than others. For example, in February 2021, they invested USD 15.00 MLN and USD 5.00 MLN.

A closer look at their investments reveals a mix of large and small investments. In May 2024, they invested USD 50.00 MLN, while in September 2022, they invested a much smaller amount of USD 10.00 MLN.

Here is a breakdown of their investments by date:

XacBank has made significant strides in ESG considerations, particularly in the area of corporate governance. The bank's board of directors is comprised of experienced professionals with a strong track record of managing financial institutions.

One notable example is the bank's commitment to transparency. XacBank has implemented a robust disclosure policy, ensuring that stakeholders have access to accurate and timely information about the bank's operations and performance.

The bank's focus on corporate governance has also led to improved risk management practices, allowing XacBank to navigate complex market conditions with greater ease.

The first green bank in Mongolia was established in 2018, marking a significant milestone in the country's journey towards sustainable finance.

This bank, which we'll refer to as Green Bank, was founded with a clear mission to promote environmentally responsible lending practices and support projects that contribute to Mongolia's environmental and social well-being.

Green Bank's focus on ESG considerations is reflected in its commitment to financing projects that minimize harm to the environment and promote sustainable development.

One key initiative undertaken by Green Bank is the development of a green loan product that provides favorable terms to borrowers who implement environmentally friendly practices in their operations.

By offering this green loan product, Green Bank aims to encourage businesses to adopt sustainable practices and reduce their environmental footprint.

The success of Green Bank's green loan product has been notable, with several Mongolian companies taking advantage of the favorable terms to invest in renewable energy and reduce their carbon emissions.

As a result, Green Bank has become a leader in Mongolia's sustainable finance sector, serving as a model for other financial institutions to follow.

XacBank is classified as E&S Category B (with IFC PS TT) in accordance with FMO's Policy. This categorization is a result of having a well-functioning Environmental and Social Risk Management System ("ESMS") in place.

Having dedicated and committed staff who continuously work on managing, monitoring, and improving the ESMS is a key factor in this classification.