Mongolia

Mongolia is a fascinating case study in digital banking. A handful of years back, barely anyone in this frontier market went online to track and pay bills, transfer cash to friends, or pay for goods and services.

Private banking is a minority pursuit in a frontier market lacking a deep seam of wealthy customers. But it’s growing, with banks preferring in the main to focus on priority banking services that target the reasonably prosperous.

It’s hard to miss Arig Bank’s commitment to corporate and social responsibility and to sustainability in general.

Mongolia’s push to develop a banking sector fit for the 21st century – a process that is being accelerated by a slew of financial reforms – is likely to benefit lenders with a diverse group of shareholders and better transparency and corporate governance.

It can be hard work being a corporate-focused lender in Mongolia. The last few years have been a slog for many banks as they confront a sluggish economy that often teeters on the edge of insolvency and that offers precious few new lending opportunities.

Khan Bank is an outlier in Mongolia in many ways. It has a diversified and international – by local standards – investor base that includes Japan-based Sawada Holdings and the IFC, the private-sector arm of the World Bank. And it is both big and small.