To contribute to sustainable development of Mongolia that can come only from educated and skilled people and competitive and dynamic businesses concerned equally about Planet, People, and Profit. The Bank will provide equitable access to transparent, reliable and responsive banking products and services to the Bank’s clients, including its traditional Micro-entrepreneurs as well as Small and Medium businesses.
XacBank was created as a result of the merger of the two largest non-bank financial institutions (NBFI) in Mongolia, Goviin Ehlel (Gobi Start) LLC and XAC (Golden Fund for Development) LLC, on 1st of October 2001. Goviin Ehlel LCC was established by Mercy Corps in December 1999 with funding from USAID as a NBFI serving rural businesses. XAC LLC began in 1998 as part of the MicroStart Mongolia project under UNDP, shortly afterwards transformed into Mongolia’s first NBFI by uniting the micro-financial service activities of six national NGOs.
These NBFIs originally operated in different geographic regions and were serving different markets, small and medium enterprises loans vs. Micro business. However, both organizations had the same strategic goal of becoming nationwide banking institutions, offering a wide range of financial services. All these factors became the foundation of the merger of these two independent institutions to form XacBank - the first commercial bank in Mongolia with a social mission. By the end of its first year of operation in 2002, the Bank established its presence in each of 21 provinces in the country. Since that time the Bank has continued to expand with new branches and extensions, Saving and Credit Cooperatives franchise service, branchless banking solutions, fulfilling its mission and strategy of providing the most accessible and transparent banking services aimed at the marginalized citizens in remote rural areas, including the nomadic herders. XacBank is continuously growing and becoming an innovative leader in offering a full range of innovative loan and deposit products with personalized customer service targeted at various segments of the market.
XacBank’s ownership comprises the EIT (Employee Investment Trust) Capital Management (24.31%), International Finance Corporation (11.81%) and the European Bank for Reconstruction and Development (11.15%) along with various ethical and social investors including Mercy Corps (15.78%) and Triodos (14.98%). Recently, the company’s shareholders have provided it with an increasing amount of debt-funding, as have other specialist microfinance investors, often with an ethical mandate. At 30 June 2009, borrowings stood at 50% of XacBank’s total funding (FY05: 29%) against deposits of 39% (FY05: 52%). These borrowings should be reasonably stable amidst the current tightened global credit conditions, although the bank may well have to now refocus more on deposit funding.