Agricultural finance

Banks held MNT 1.52 trillion of loans to agriculture, forestry, fishing and hunting at the end of 2025, about US$427 million at the year-end exchange rate, and MNT 1.47 trillion in August 2026 (preliminary)¹². The stock was MNT 141.8 billion in 2010 and MNT 504.1 billion in 2023, so it tripled in two years¹. In dollars it grew from US$113 million in 2010 to US$427 million in 2025, as the togrog lost 65% of its value against the dollar over the period (own calculation)¹². Crop farming accounted for MNT 938.1 billion and livestock enterprises for MNT 538.3 billion at the end of 2025¹. Farm loans are almost entirely in togrog¹.

Most lending to individual herders is recorded separately. In May 2020 the Bank of Mongolia created a 'herder loan' category, which stood at MNT 1.29 trillion in August 2026 across 114,654 loan accounts¹³. Together, agriculture and herder loans were MNT 2.76 trillion, about US$768 million, or 5.7% of bank loans in August 2026 (own calculation)¹². The agriculture sector alone accounted for 1.6–2.3% of bank loans in 2015–2023 and 3.0% in August 2026¹. Banks issued MNT 713.2 billion of new loans to agriculture and MNT 867.1 billion of herder loans in 2025⁴.

Market credit is expensive. The weighted average rate on new togrog loans was 17.27% in December 2025, excluding programme loans¹⁰. New herder loans carried 22.13% in December 2025, while new loans to the agriculture sector carried 9.17%, and 8.95% excluding programme loans⁵. On outstanding loans, agriculture carried 8.66% in December 2025 against 16.37% for all sectors⁵. The Bank of Mongolia raised its policy rate from 6% to 13% during 2022, cut it to 10% in 2024 and raised it to 12% in March 2025 and 12.5% in August 2026¹⁰¹¹.

The non-performing loan ratio in agriculture has fallen as lending has grown. Non-performing loans to the agriculture sector remained at MNT 72–80 billion from 2018 to 2026, mostly in crop farming, and their ratio fell from 26.0% in 2020 to 4.8% at the end of 2025 (own calculation)¹. Non-performing herder loans were 1.8% of herder loans at the end of 2025¹. The headline banking NPL ratio on the IMF basis was 3.5% in 2025¹². After the 2023/24 dzud, the Bank of Mongolia approved a one-time restructuring and extension of herder loans, and the Ministry of Finance paid interest support on them¹³.

State programmes now finance most farm loans. The Bank of Mongolia reports loans 'implemented with projects or programmes', financed from state or donor funds. For agriculture these rose from MNT 104.0 billion at the end of 2023 to MNT 586.1 billion in 2024 and MNT 1.23 trillion in 2025, about US$345 million, or 81% of the sector's loans¹². The number of programme-funded agricultural loans rose from 1,610 to 27,973 over the same period³.

Several programmes stand behind this growth. The 'Food Supply and Security' movement of June 2022 directs the Government to arrange MNT 1.7 trillion of financing for 2022–2026, about US$541 million at the 2022 average rate, through interest subsidies, guarantees and external loans¹⁶². The 'New Cooperative Movement' of April 2024 is a MNT 5 trillion plan, about US$1.47 billion at the 2024 average rate, under which the state pays the interest above 6 percentage points on loans of up to five years to cooperative member herders¹⁷². The Atar-4 crop campaign, approved in January 2025, runs for four years and provides concessional loans, with state interest support capped at the policy rate¹⁸. Official data on the amounts lent, the number of borrowers and the budget cost of these programmes were not found. The Credit Guarantee Fund provides guarantees of up to MNT 1.2 billion on food and agriculture loans at 5–6%¹⁹.

Non-bank financial institutions lend little to agriculture. Their agricultural loans were MNT 74.3 billion at the end of 2025 and MNT 81.3 billion in June 2026, about 1% of their portfolio⁸⁹. The Financial Regulatory Commission consolidated report covered 575 NBFIs at the end of 2025⁸. Savings and credit cooperatives numbered 176 at the end of 2025, with 77,155 members and MNT 290.9 billion of loans, of which MNT 78.9 billion at 94 rural cooperatives²³. In June 2026 there were 173 cooperatives, 93 of them rural, with 79,593 members²⁴. Their lending by sector is not published. Account ownership is almost universal, at 98.3% of adults in 2024, and domestic credit to the private sector was 44.9% of GDP in 2024²⁵²⁶.

Mongolia has insured herders against dzud through an index rather than individual claims since a World Bank pilot began in 2005³⁰. The 2014 Law on Index-based Livestock Insurance makes cover voluntary and pays out when adult livestock mortality in the soum exceeds thresholds set by the Government, currently 5% and 30%³¹. Herders pay the premium for losses between the two thresholds, and losses above 30% are borne by the state-owned National Reinsurance JSC, whose reinsurance premium the Government budgets³¹³². In 2025 insurers wrote 2,555 contracts with MNT 3.18 billion of gross premium, and brokers sold 19,350 individual contracts³³. After the 2023/24 dzud the reinsurer paid MNT 14.6 billion of claims in 2024, 92% of all its claims that year³³. A parliamentary cost assessment of a draft amendment reports that the average premium per insured herder household rose from MNT 98,409 in 2014 to MNT 174,023 in 2024, for an average of 205 insured animals per household in 2024³⁴. The total number of herders and animals insured is not published in the Financial Regulatory Commission reports. Insurance premiums of all types equalled 0.66% of GDP in 2025, and no crop insurance premium was recorded³³.