Xac Leasing

Debt : August 2018 - March 2023

Xacleasing is a leasing company established in 2007 in Mongolia.

Amount

€ 4,333,800.00

Type of investment

Debt

Development impacts

Local economic growth
Private sector consolidation/innovation
Financial inclusion

Beneficiary locations

Asia: Mongolia

Investment field

Financial Institutions

Activity

K64.91 Financial leasing

Organisation

Xac Leasing

Website

https://xacleasing.mn/

Domicile

Mongolia

More investments in

Xac Leasing

Debt € 3,865,000.00 (2012-2018)
Subsidy € 20,516.10 (2018)

This company is as a subsidiary of TenGer Financial Group, a reputable financial services group in Mongolia.

In Mongolia, capital markets remain underdeveloped and banks are often unable or unwilling to undertake long-term lending to SMEs. Banks lend to larger, established businesses with well-developed balance sheets and credit histories. Most SMEs are on the contrary cash-flow oriented, and lack the organized historical financial records and/or collaterals needed for conventional bank financing. For these businesses seeking long-term finance to acquire the tools and equipment needed to support their growth and expansion, leasing is an attractive option.

Independent leasing players such as XacLeasing focus for competitive reasons on the specific needs and constraints of SME clients, with added flexibility, better understanding of their needs and using a different approach to credit analysis (cash flow rather than balance sheet based). This niche strategy has proven to be effective in numerous developed and developing economies, and to provide the biggest benefits in terms of development impact and sustainable job creation.

This is the second time that BIO is providing a loan to Xacleasing, in order to enhance the resilience of the financial sector. Indeed, as leasing companies have no access to savings, the access to funding is the biggest challenge for the sector to be able to grow.

Development impacts

Local economic growth
According to IFC reporting, between 2013 and 2016, XL created and sustained 7,913 jobs.
Private sector consolidation/innovation
Improve access of companies to safe, quality, and competitive equipment in a country where value chains and infrastructure are under-developed and where the economy remains dominated by low added value unprocessed minerals.

In terms of market structuring and consolidation, it will reinforce the offer of leasing products, as the sector is underdeveloped in Mongolia.
Financial inclusion
By supporting the leading independent leasing provider in Mongolia, our financing will strengthen one of the very few funding alternatives for unbankable MSMEs while access to finance is the top obstacle for local SMEs according to EBRD strategy for Mongolia 2017.