Memorandum signed between Oyu Tolgoi, IFC and development agencies to support SMEs

A memorandum to support the development of small and medium enterprises (SME) in Mongolia by facilitating necessary trainings for SMEs in various business practices was signed by several organizations including the International Finance Corporation (IFC), a member of the World Bank Group, Oyu Tolgoi LLC, Deutsche Gesellschaft Fur Internationale Zusammenarbeit (GIZ), the Gobi Oyu Development Support Fund (DSF), and the Umnugovi governor.

A co-financing agreement between the Gobi Oyu Development Support Fund (DSF) and GIZ was signed. The program aims to train SMEs in health, safety and environment, business integrity, business management, supply chain management, and more to improve their competitiveness and sustainability while meeting world class mining and other industry's needs, but also to facilitate financial literacy and capacity building programs.

“In Mongolia, 98 percent of all businesses are classified as SMEs, but they contribute only 25 percent to the country's GDP. While they account for 90 percent of Mongolia's jobs, these businesses struggle to grow and develop. Only 10 percent of Mongolian companies are able to regularly access finance through banks,” the IFC reported.

"Our focus is on programs with long-term contributions that support sustainable development in close cooperation with a range of national and local stakeholders. With this partnership, we start a new era of multi-stakeholder support for SMEs Capacity Building Program in Mongolia,” said Armando Torres, CEO of Oyu Tolgoi LLC.

“On behalf of the German Ministry for Economic Cooperation and Development, GIZ has been active in Mongolia for over 25 years in various development sectors and this time, with pleasure, we will lead the joint capacity development program for Mongolian businesses. GIZ brings global expertise from more than 130 countries in SME development, building on our strong commitment and longstanding links to Mongolia,” said Stefan Hanselmann, head of the GIZ program Integrated Mineral Resource Initiative.

Governor of Umnugovi Province and Board Director of DSF, "This event has shown strong evidence of positive and constructive partnership between Umnugovi aimag and Oyu Tolgoi towards a sustainable business development and provides rare opportunities for all SMEs at local regional and national levels. One of the key priorities of Umnugovi aimag's development strategy is economic development and diversification through SME development. Today, DSF enables establishment of multi-stakeholder partnership with GIZ, IFC and Oyu Tolgoi and leverage investment to the SMEs development that is a strong foundation for economic growth and diversification for many years to come".

"This partnership will enable demand for inputs and services from mining companies to be aggregated and communicated to local suppliers. This will help enhance transparency and generate greater opportunity — and hence, sustainability — for SMEs, which will be upgrading their skills through this program," says IFC Resident Representative for Mongolia Tuyen Nguyen.