The weighted average interest rate of new MNT loans decreased by 2.3 percentage points and fell to 17.7 percent in September according to the Bank of Mongolia. In the reported period, new MNT savings accounts weighted average interest rate decreased by 1.3 percentage points and fell to 11.4 percent in September.

Looking at credit interest rate statistics business loans have a lower than average interest rate of 17.1 percent. In the last three months consumer loan demand was higher than business loans’. Bank of Mongolia reported that in the next three months banks are expecting low demand growth in both consumer and business loans. In terms of structure about half of total loan outstanding is business loans. Compared to the previous year, business loans increased by 19 percent while consumption loans had a higher growth increasing by 24 percent.

In September, overdue loans decreased by MNT 27 billion or 3 percent, non-performing loans decreased by MNT 8 billion or 1 percent. However, non-performing loans make up 8.3 percent of total loan outstanding which is higher than the proper level according to the BoM. Thus, in the 2019 Monetary policy main directive proposal strategies concerning non-performing assets were included to be implemented. The central bank reported that over 50 percent of the NPLs are made up of the processing, mining and construction industries.

Source: BloombergTv.mn