A new product has launched on Mongolia’s capital market: the Gender Bond—a financial instrument designed to support women entrepreneurs. Issued by Khan Bank, this bond aims to expand women’s access to finance, support women-led businesses, and reduce structural gender inequality in the economy.

Collateral, credit, and other barriers

Women lead more than two-thirds of Mongolia’s small and medium-sized enterprises (SMEs). According to the National Statistics Office, between 45,000 and 50,000 registered businesses are female-owned. Yet most of these women operate in micro, small, or household-based industries, facing significant challenges when trying to scale up. These include a lack of access to capital, limited collateral, high interest rates, poor work-life balance, and restricted access to information or networks.

Among these, the most pressing barrier is access to finance.

A 2021 study by The Asia Foundation on the impact of COVID-19 on women-owned micro and small enterprises found that 53% of respondents had no collateral, and 42% borrowed under a relative or friend’s name. The root of the problem lies in gendered property ownership norms: in many households, assets are registered and passed on in men’s names. For instance, a 2013 study by the Mongolian Women’s Fund showed that only 27.2% of land in a sample of 800 urban and rural households was owned by women.

“One of the biggest challenges for women entrepreneurs is access to finance,” said Munkhtuya Rentsenbat, CEO of Khan Bank. “Many women can’t meet the collateral requirements for loans. Because they run mostly small and medium-sized businesses, the interest rates tend to be high as well. This bond will improve accessibility, helping women expand their businesses, create jobs, and contribute more fully to Mongolia’s economy.”

MNT 30 Billion to Support Women Entrepreneurs

Under its gender-responsive finance initiative, Khan Bank is issuing Gender Bonds worth MNT 30 billion to support women-owned businesses. A total of 300,000 bonds, each with a face value of MNT 100,000, are being offered to the public. The bonds will have a 36-month maturity period, with an annual interest rate of 16%, paid semi-annually.

The bond will be publicly traded for the first time on the Mongolian Stock Exchange. The issuance is managed by Ulzii & Co. Capital as underwriter, with KhaanLex Partners providing legal counsel and PwC Audit overseeing financial auditing.

More than gender equity

Supporting women entrepreneurs isn’t just about fairness—it’s also a powerful engine for economic growth and poverty reduction. Studies have shown that women’s income is more likely to be invested in household needs, such as children’s education, healthcare, and overall well-being. Women also tend to be more financially responsible borrowers, known for high repayment rates and long-term business commitment.

“When women participate in the economy, we see gains in both GDP and social responsibility,” explained Munkhtuya. “When a mother has income and financial independence, her children benefit directly—from better education to improved health and overall development. Women are also very responsible. The loan delinquency rate among women borrowers is just 1.5–2%, compared to a national average of 4.3%.”

One of the most widely studied models of gender-focused lending is the Grameen-style microfinance approach, now active in more than 100 countries.

Initially developed by Nobel Laureate and economist Muhammad Yunus in Bangladesh, the Grameen Bank model provides small, trust-based loans to those who don’t qualify for traditional credit, especially women. The impact has been transformative: over 70% of Grameen’s women borrowers became heads of households; more than 4 million women launched small businesses, with 60% formalising their operations and registering as taxpayers. As a result, 80% of their children enrolled in school, with measurable improvements in educational outcomes.

Investing in women is investing in social change. The Gender Bond is more than a financial product—it’s a tool to make dreams possible, shift the balance of economic power, and build a more inclusive future for Mongolia.