Story
When I started XacBank in 1999, we were a small microfinance company in a developing country. I knew that if I wanted the business to grow, I would need to attract foreign investors. But I was up against some great challenges: Mongolia was transitioning to a more open, modern capitalist society and at the time, very few people had even heard of Mongolia. When I would attend international finance events and conferences, I was often the first Mongolian person the attendees had ever met.
But I was determined to attract new investors, and relied on innovative measures to drive growth and performance. I have always been able to see opportunity, deploy capital to drive growth and deliver great results for investors.
Our initial investors were socially-minded individuals from international financial institutions. Between 2000 and 2010, my team and I attracted investments from International Finance Corporation (IFC), European Bank for Reconstruction and Development (EBRD), the Dutch Entrepreneurial Development Bank (FMO), and numerous U.S. and EU-based investment funds for XacBank and TenGer Financial Group. They included both debt and equity deals, and were mostly the first deals these investors had made in a Mongolian company. These were considered ground-breaking deals for Mongolia at the time, and were milestone investments for the country’s fledgling banking sector.
As their first point of contact when investing in Mongolia, I never thought that we would end up delivering superior returns to them. I was — and still am — passionate about bringing banking and financial services to a very underserved market and always told our investors we would try our best to deliver results. But in the end, we always produced much higher returns than what we promised investors.
Impact
Over the years, returns made by individual equity investors have varied — and I can proudly say that over the past 20 years all of them have made sizeable returns. For example, Shorebank, BlueOrchard and Microcred all made annual 50 to 100 per cent returns upon their exit from XacBank.
As I watched Mongolia transform in the early 2000s, I began to recognize its potential for great economic opportunities. These years marked a new, exciting time for banking and financial services and I felt that the industrious people of Mongolia needed increased access to these services. With the domestic lending environment nearly tapped, I felt that the way to unlock faster growth was to bring in foreign investment to build capabilities faster than other domestic banks could.
These foreign investments helped us further strengthen the institutional capacity of XacBank, and enabled the bank’s team to build a stronger platform for expansion. My early work in attracting foreign investments has had ripple effects on the Mongolian economy: XacBank is now one of the best commercial banks in Mongolia, and those who weren’t able to access banking before can now open bank accounts and benefit from financial services much more easily. XacBank, as well as other banks and non-banks, have also been able to open its doors to access international capital markets. Quite simply, these foreign investments have opened Mongolia to the world and has driven social and economic success for both its citizens and foreign investors. And I am set on completing my mission. Recently, Ard became a key investor in the Ulaanbaatar Securities Exchange — which will be able to further help Mongolian businesses access capital for growth in the years to come.