The EBRD is continuing to support the diversification of the Mongolian economy with a US$ 4 million senior loan and US$ 2 million mezzanine loan, one of the first in the country, to support the leading electronic retailer BSB Service.
The proceeds of the senior loan will be used to build a large, modern and specialised retail store in the Khan Uul district of the capital city Ulaanbaatar. The mezannine loan proceeds will be used for inventory financing of new stores and to finish the construction of a new warehouse.
Besides computers and consumer electronics, the company has recently expanded to offer home and office furniture. As European Bank for Reconstruction and Development reported, it offers the widest range of international consumer electronics brands in the country and is the sole distributor of several global brands.
In Mongolia consumer goods and electronics sales are still lagging behind the rapid GDP growth. The market is expected to continue its growth in the near future, as improving economic conditions allow the broader population to afford new domestic appliances, computers and other equipment.
The country is the most sparsely populated in the world, with half of the population living in the capital Ulaanbaatar; but the demand for services is growing.
“The EBRD is proud to support BSB Service – a fast-growing, locally-owned retailer that is responding to opportunities brought about by strong GDP growth and consumer demand. The Bank strives to support the diversification of the Mongolian economy, including the services sector,” said Frederic Lucenet, EBRD Director for Manufacturing and Services.
“We are planning to open a new six storey MegaMall store with an area of 6,000 sq metres, in a high density district in Ulaanbaatar city and it will offer worldwide recognised brand products of furniture, consumer electronics and computer appliances to our customers. The new MegaMall store will expand BSB operations to all seven districts in Ulaanbaatar, while taking advantage of the economy’s fast growth for BSB and fulfilling our goal of cementing our position as Mongolia’s top electronics retailer. We are very grateful to the EBRD for provided financing of US$ 6 million to support this project, and we see this as a beginning of working with international financial institutions and hope our collaboration will be expanded in the future,” said Mr.Jargalsaikhan Banzar, the General Director of BSB Service.
Since the beginning of its operations in Mongolia in 2006, the EBRD has invested over US$ 846 million in over 47 projects in different sectors of the economy, mobilising an additional US$ 1.8 billion from other sources of financing. All of the EBRD investment in Mongolia has been in the private sector.