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Country Highlights Mongolia

Country Highlights Mongolia. NHB-APUHF International conference 30/Jan/ 2012 Enkhbayar Tsedendorj. Content. Mongolian housing market growth Mining town Housing development Mortgage market overview Potential development of Mortgage market

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Country Highlights Mongolia

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  1. Country Highlights Mongolia NHB-APUHF International conference 30/Jan/ 2012 Enkhbayar Tsedendorj

  2. Content • Mongolian housing market growth • Mining town Housing development • Mortgage market overview • Potential development of Mortgage market • Development of Secondary mortgage market and MIK’s function • Conclusion

  3. Housing Areas: Ger area • Population 2,75 million, Total # Households-714,000 • 45% of them in Ger including 33% urban households • Urban- 67%; Rural 33% • Ger and Housing, % • Urban: 33:67; Rural: 71:29 Source: Mongolian 2010 Census

  4. Mongolian housing market growth • Over the 20000 units under construction in UB alone • The volume of housing units per year will have to be at least 10,000 to meet demand, including the mining towns Source: MRTCUD Housing supply, by thousand sq m

  5. “TSETSII” Mining Town Housing development in South Gobi, TsogtTsetsii soum, by Energy Resources Company Area: 21 hectare 1648 flats for mining workers Social and physical infrastructure facilities will be provided Source: ER, MCS property

  6. Current Housing Development

  7. Ulaanbaatar city

  8. Country side picture-1

  9. Country side picture-2

  10. Country side picture-3

  11. Mongolian Ger

  12. Country side picture-4

  13. The strong growth of banks begun in 2004 has resumed Source: BOM and TDB

  14. Mongolia’s strong GDP growth will drive strong loan growth Source: IMF and TDB

  15. Mortgage lending in Mongolia will grow dramatically The sources are BoM, IMF, MIK TDB

  16. Providing Home ownership to more and more Mongolians Source: MIK and TDB

  17. Mongolian mortgage market overview(1) • Mortgage Standard: • LTV <70% • DTI>45% NPL % Mortgage loans-0,45% MIK portfolio-0.0% * Source: Monetary Policy and Research Department, Bank of Mongolia

  18. Mongolian mortgage market overview(2) * Source: Monetary Policy and Research Department, Bank of Mongolia

  19. Housing Price Index , by 6 districts of the Capital city * Source: Bulletin of National Statistic office **Note: Statistical substitutional methodology has been used on some apartment price data.

  20. MONGOLIAN MORTGAGE CORPORATION + Established 06.09.2006 Why we established MIK • Increase the affordability of the housing loan • Stable structure for long term financing • Liquidity facility • Increase in housing mortgage market • Need for capital market development

  21. Mission statement • Promotion and development of primary and secondary mortgage markets • By raising medium to long term funds on domestic and foreign capital market • Through a series of capital market tools to create and ensure smooth functioning of long-term financing system • To promote affordable home ownership and urban development for Mongolia’s people.

  22. МIK OPERATION • Purchased 10 Mortgage pools • MIK issued Covered Mortgage Bond in 2009 -9,7 Bln MNT, 2, 3.5, 5 years, 14-14.5% • Got an approval from the Financial Regulatory Commission to issue 25 bln MNT bond ; • Mortgage Legal and Regulatory framework • Mortgage standardization and Documentation - IFC and KfW, EBRD • Mortgage law July 2009 • Asset based security law April 2010 • Shelf registration , OTC procedure • Listed as a repo financing instrument under Central Bank of Mongolia • Capital increase, offering equity investment to potential investors

  23. Cooperation and recent development • Cooperation with IFC, KfW, USAID, APUHF, EBRD • IFC: 2 Small TA-Mortgage toolkit adaptation and Housing micro finance • KfW: Loan and TA project through Government FSM • USAID: Legal framework and Mortgage bond Guarantee 50% • Wharton school International HFP, Hofinet data : • CAGAMAS

  24. Conclusion • Considerable housing needs to be built in Mongolia • Mongolian mortgage market is developing rapidly • Secondary market development will be essential • Foreign investors in covered bonds or mortgage backed securities will be needed • MIK, with strong local and international support, is poised to create quality investment instruments • Investors in the housing market, as well as the secondary mortgage market are welcome

  25. THANK YOU Mongolian Mortgage Corporation LLC /MIK/ MIK Building , United Nations street-38 Chingeltei district-4, 15160 Ulaabaatar, Mongolia www.mik.mn, info@mik.mn Tel: (976) 11-328267 Fax (976) 11-313338

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