Draft:Khan Bank

Khan Bank is one of the largest commercial banks in Mongolia, operating with over 6,300 workers. Khan Bank has 14 senior management professionals, 33 middle management professionals, and a network of 528 branches and 335 ATMs throughout Mongolia. The Bank has the largest by total assets in Mongolia, making it a key player in Mongolian finance sector. The bank has an executive management committee, comprising the chief executive officer (CEO), where Munkhtuya Rentsenbat has worked as since December 28, 2020 succeeding John Bell, who has been the CEO of Khan Bank since 2016. She is a graduate of University of Finance and Economics of Mongolia and holds a master's degree in economics and banking from National University of Mongolia and earned an MBA from Handong Global University in South Korea.

History
Khan Bank was established in 1991 as the Agricultural Bank of Mongolia and was owned by herdsman and farmers until in 2003 where it privatized and renamed as Khan Bank. From the assets of the former state bank, the agricultural bank was established to serve the agriculture and livestock sectors. Khan Bank went into crisis in 1996-1999 as corruption and mismanagement impaired its liquidity and financial position and eventually lead to the Government of Mongolia and the Central Bank reinvested jointly in and privatizing the institution towards the 2000s. In 2000, Agriculture Bank of Mongolia was staring at a potential failure but with a help from DAI and World Bank;'s help, The Bank was able to do a complete turnaround and spread financial coverage to rural parts of Mongolia exploding to 500 branches and by 2003, Khan Bank served 80 % of all Mongolian households. Khan Bank reaches 98 percent of rural communities, and massively expanded deposit, loan, and other service offerings to clients, including pensioners, nomadic herders, and small enterprises. For the price of a two-year, $2.5 million management contract, USAID turned Khan bank into a $125 million enterprise that has become fundamental to Mongolia’s economic and social infrastructure. Khan Bank considered an IPO in 2008, but because of the events of the global financial crisis those plans were put on hold. As of 2008 the biggest 5 banks controlled 78.5% of total bank assets of Mongolia and the largest 3 holding 60.1% of total, one of them being Khan Bank. In 2009 share of 5 biggest banks rose to 82%, all of them being private banks with foreign owners. the same year also saw a a small GDP growth in Mongolia of only 0.5% which caused a low money supply.performing is overly dependent as there was an increase in NPL (non-performing loans) and the lack of money supply. NPLs increased by as much as 50%. Just few years after, In 2012, Mongolia faced immense economic growth and caused a liquidation issue in local banks, including Khan Bank, where banks seek foreign capital to satisfy the demand. Khan Bank in 2023 earned the bank of the year award alongside banks from 130 countries around the world.

Microfinance
Khan bank and Xas Bank are two of the banks that are involved in Micro-financing. Khan Bank remains a large player in the Mongolian micro-financing programs h many of the rural communities depending on the loans and programs from Khan Bank. The average annual growth rates of the number of borrowers for Khan Bank was 21 percent average loan size also increased by 36.7 percent for Khan Bank. Herders made up a significant portion of borrows and 2/3rd of the surveyed borrowers live in a ger, a tradiitional Mongolian dwelling. Of 15 commercial banks in Mongolia that are operating currently, only three banks, Khan, XAC and Mongol Post banks have a wider network of rural branches. In terms of product variability and number of branches Khan certainly is the leader and fills one of the larger roles in micro-financing. Despite the borrowers mostly being herders, use of immovable as well as movable assets being used for loans has caused issues as herders can use livestock, gers, motorcycles and even their own relatives assets to secure loans furtehr exasperating the inequality between Mongolia's urban wealth and rural settlements. Despite Khan Bank's over involvement in rural areas, Khan Bank has three times the interest for loans compared with other competitors the same size such as Golomt bank. This makes Khan Bank one of the more profitable with ROAA showing the biggest increase in 2009.

Sustainability
MicroVest invested $10 million in Mongolia’s first ever green bond to support the Mongolia's green developments. MicroVest, the asset management arm of DAI Capital, subscribed as the sole private institutional investor in a $60 million five-year bond, also supported by a $15 million contribution from the World Bank’s International Finance Corporation (IFC) and $35 million from FMO, the Dutch development finance institution. The bonds will help further Mongolia's investment in sustainable developments such as waste management, reforestation and green renewable energies.

Asian Development Bank has worked with Khan Bank to further gender equality in Mongolia. Khan Bank has more than half of the employees are women and has a gender action committee to support women led households in Mongolia and reach women entrepreneurs and workers. There are trainings, financial literacy initiatives and targeted marketing for gender equality. Female employees make up a staggering 66% of the company and on average over 600 employees were on maternity leave during one year. This makes Khan Bank one of the key players of gender equality in Mongolia.