Prime Minister N.Uchral received leaders of the banking and financial sector last week to advance the Government’s green financing policy, announcing expanded loan terms, reduced interest rates and a sweeping tax reform package as part of the country’s broader Green Development Liberalization agenda.
Governor of Mongol Bank S.Narantsogt announced that green loan terms have been extended from 30 to 60 months, cutting monthly payments by approximately 40 percent, with interest rates set four to six percentage points below standard loan rates. The loans cover solar panels, electric vehicles and building insulation.
“Green Development Liberalization is not a slogan, but a real work,” Prime Minister N.Uchral said, adding that the Government, Mongol Bank and the financial sector are jointly committed to expanding green lending across the country. The state has moved beyond policy declarations into early implementation. A total of 83 households in Chingeltei District are now generating energy through solar panels and collectors and feeding surplus power into the central grid, a development the Prime Minister described as “the real beginning of the policy of energy efficiency, green investment, and sustainable financing”. A government resolution reducing dependence on fossil fuels has already been adopted, and a 15-stage bureaucratic approval process that previously hindered green energy projects has been dismantled.
Governor S.Narantsogt said the Development Bank is preparing to attract lower-cost green financing sources and develop blended financing solutions. The Government also signaled strong support for green bonds in the capital market as an additional instrument to fund the transition. Officials acknowledged that work remains, including expanding subsidy sources and ensuring loan accessibility accounts for varying household income levels.
The Premier also outlined a tax reform package submitted to Parliament, framing it as relief for working Mongolians and small enterprises. Key measures include a 100 percent reduction in personal income tax for monthly incomes up to 792,000 MNT, an increase in the VAT registration threshold from 50 million to 400 million MNT, and a one percent tax rate for companies earning up to 2.5 billion MNT annually. In the first month of a tax debt amnesty period, the Government reopened accounts for companies carrying tax and VAT arrears, and 146 businesses were cleared to resume operations immediately without requiring additional permits.
The meeting also addressed mounting pressure on the housing mortgage program. Over the past 13 years, 144,600 households have obtained homes through the joint Government and Mongol Bank mortgage initiative. Commercial bank loans now account for 62 percent of total housing lending. However, demand for the Government’s subsidized six-percent mortgage loan far outpaces supply, with 47,000 applicants currently on a waiting list. Governor S.Narantsogt said the central bank and the Government are working to amend housing mortgage financing regulations and establish a dedicated Housing Financing Bank to ease the bottleneck and introduce a wider range of mortgage options.
