Overview of financial sector now available

The Financial Regulatory Commission has virtually presented its Overview of the Financial Sector for the First Quarter of 2021. The commission oversaw operations of 3,302 regulated entities and 2,429 insurance agents.

As of first quarter of 2021, regulated stock market, insurance market, non-banking financial institutions (NBFI) and savings and credit cooperatives accounted for 17.5 percent of GDP. The stock market capitalization made up 9.9 percent of GDP, insurance market 1.1 percent, NBFI 5.7 percent and savings, and credit cooperatives 0.8 percent.

STOCK

In the reporting period, market capitalization shot up 48.5 percent year-on-year to 3.7 trillion MNT, which is equal to 10 percent of GDP in 2020. However, the liquidity of shares and the Top 20 Index of the Mongolian Stock Exchange stood at 1.8 percent and 34,635.7 points, indicating rises of 1.4 percentage points and 17,732 points respectively.

Securities worth 71.8 billion MNT were traded on the Mongolian Stock Exchange, of which 91.8 percent were stocks, 5.7 percent assetbacked securities, 1.8 percent investment fund, and 0.7 percent corporate bonds.

The Mongolian Agricultural Commodities Exchange, on the other hand, traded five types of goods worth 69.3 billion MNT, marking a whopping 145.1 percent surge compared to the first quarter of 2020.

INSURANCE

The total assets in the insurance sector jumped 14.6 percent to 401.2 billion MNT and the reserve fund increased by 9.3 percent to 172.6 billion MNT in the reporting year.

At the end of the first quarter, total premium of ordinary and long-term insurances and the reinsurance premium reached 39 billion MNT and 10.9 billion MNT, both declining by 4.2 percent and 16.4 percent from a year ago. The number of insurance items dropped to 881,000 (down by 29 percent), while the cost of indemnity insurance shrank 21.3 percent year-on-year to 12.3 billion MNT. This is equivalent to 31.6 percent of total collected premium.

NBFI

A total of 520 NBFIs were active in Mongolia as of March 31, with total assets amounting to 2.1 trillion MNT. NBFI total assets grew by 17.6 percent compared to the same period of last year.

Total outstanding loans amounted to 1.4 trillion MNT (11.8 percent), almost half of which were consumer loans. A breakdown of outstanding loans show that 85.3 percent of total loans are retail loans and 14.7 percent are corporate loans.

The commission highlighted that increased supply of loans in the financial sector has boosted access to credit services of NFBI. The number of borrowers grew 1.4-fold to 610,100 at the end of first quarter of 2021. Introduction of new technology-based financial products combined with better supply of credit attributed to increased access to credit services, according to the commission.

The weighted average monthly interest rate of loans stood at 2.9 percent, down by 0.1 percentage points year-on-year. The average loan amount per borrower was 2.3 million MNT.

The report showed that three in five borrowers are fintech companies and their loan amount averages 270,700 MNT per borrower.

SAVINGS AND CREDIT COOPERATIVES

As of first quarter of 2021, the number of active savings and credit cooperatives remained at 249. These cooperatives provided financial services to 72,002 members. Total assets of cooperatives amounted to 278.9 billion MNT (up 21.5 percent), with deposits accounting for 201.4 billion MNT or 72.2 percent.

The weighted average monthly interest rate of deposits was 1.4 percent, down by 0.1 percentage point year-on-year, while the weighted average monthly interest rate of loans stood at 2.4 percent, also down by 0.7 percentage points.

Total outstanding loans of savings and credit cooperatives grew 11.1 percent to 192.1 billion MNT, of which non-performing loans accounted for 3.64 percent. The total number of depositors in the sector was 40,166 and the number of borrowers was 38,353 at the end of March 2021.

REAL ESTATE

In the reporting period, 185 registered real estate agencies traded 98,600 square meters of property and real estate worth 127.2 billion MNT through intermediary. On the other hand, they leased and rented a total of 39,300 square meters and real estate worth 2.8 billion MNT.

PRECIOUS METALS AND STONES

In the reporting year, licensed traders sold precious metals amounting to 101.9 billion MNT and purchased precious metals worth 103.6 trillion MNT.