MIK has recently gained a secure and prosperous foothold in its climb to the sky-tall peaks of Mongolia’s future development. The company’s current confidence is built on the actual facts and figures.
Some foreigners may still conceive of all Mongolians as bonded to their traditional nomadic livelihood, sheltering in round white yurts in the wide grassland steppes. However, Mongolian’s real inclinations and aspirations are distinctly different from this image. Today’s visitors to Ulaanbaatar will see steel construction frames and commission ready buildings. This is Ulaanbaatar city, future of Mongolia’s capital development, a showcase of metropolitan expansion with high growth potential. With the city becoming a densely populated area by the rapid growth of urbanization, the construction sector is inseparable to the city’s real estate development. New homes are needed, and families must be able to borrow so as to to buy them. To achieve an effective, reliable, and systematic implementation of citizens housing programs using procedures proven worldwide, Mongolia must have a resourceful mortgage company. After years of patient groundwork and intensive nurture of human capital, Mongolia how has such a company in place- MIK.
Within the past two years, MIK has pooled 47,500 household mortgages and bundled them into residential-mortgage-backed securities with a total value of MNT 2.1 trillion. For a sovereign state with 3.0 million inhabitants and a GDP of MNT 17.0 trillion, this is a sizeable figure. Even more significant than these quantitative indices is the carrying asset value. Mr. N.Zoljargal, Governor of the Bank of Mongolia, summarizes: “MIK is developing a new financial instrument in Mongolia”. The emphasis here is on “a new financial instrument”.
Exactly 10 years ago,the Bank of Mongolia and 10 commercial banks founded MIK with the goal of developing the mortgage market in Mongolia. Back then, when even the term “mortgage” was relatively new most of Mongolians, a broad public awareness of the need to leverage housing and homeownership for the country’s development had not yet materialized. The reason was shortcomings in accurate planning, sequential coordination, and regulation. That period was marked both by developers’ supply shortage in delivering ready for-sale housing property and high demand for robust, sustainable long-term mortgage financing to mitigate market risks. It was at this time that MIK was instituted.
While Mongolia’s market size is limited and every undertaking required careful compliance, conditions and timing were conducive to MIK’s purposes. Our company’s leading operations advanced swifly to overcome the lag in following international best practice. With the right regulations in place and effective management, MIK settled its first asset-backed security issuance within two years of its founding.
About five years later the Government of Mongolia and the Central bank began the 8-percent mortgage program for low-and middle-income households, which was both a turning point and and a starting point for MIK’s intensive growth. The company’s most important achievement is the widened mortgage accessibility. Mortgages, previously available only to households with a monthly income of 4.0 million MNT, opened upto to to households with 1.0 million MNT proven monthly income-75% lower. When asked, “What was the biggest achievement that you’ve accomplished so far?” Mrs. D.Gantugs, CEO of MIK Holding JSC and CEO of MIK HFC LLC, simply replied: “Successfully carrying out our work.” Beyond this commonplace reply, however, one will find a definitive influence on the economy, starting with increased affordable homeownership by ordinary citizens in combination with tangible and reliable accumulated wealth, improved financial literacy, and adherence to financial-obligations discipline. Mr. B.Garamgaibaatar, in until recently Chair of the Parliament’s Economics Standing Committee, commented in a interview: “The mortgage program is not only about subsidizing citizens’ welfare, but is more importantly a form of public wealth accumulation.” For instance, four years ago the share of mortgages in the country’s GDP constituted 5.06 percent. Since the start of the program this ratio has been growing steadily, reaching 14.82 percent as of the end of last year. Over the past three years 7 RMBS’s were issued and settled with a total value of 2.1 trillion MNT, forming a pool of future funding.
Clearly, a single company’s operational performance, however excellent, makes limited contribution to the revival of the country’s overall economy. Nevertheless, early in the recovery and the resurgence of demand in public housing policy directed to the citizens needs, MIK’s responsible, reliable and profitable performance has unarguably made a considerable contribution to the Mongolian economy. Presently about 68,000 households are willing to take advantage of the affordable mortgage program and have started saving their cash,accumulating mortgage down payments. A further 31,000 households were observed to have already maid partial down payments. Given such an outlook of increasing demand, a strong financial backing is essential. In addition to its financial sustainability and development of assured profitability, MIK’s decision to become an publicly traded company was a significant way to strengthen its corporate governance. Last December, the company was reorganized into an open joint-stock company whose shares began trading on the Mongolian Stock Exchange. MIk also became the first company ever to be ranked in the Tier 1 classification of all listed companies.
Since its first activity ten years ago, with its inception of a new financial instrument in the housing market, MIK has now gained a firm financial foothold in the Mongolian economy. The company’s long-term vision for the coming 20 years is focused on maintaining its leading status, honoring the trust of shareholders and bond investors, adding sustainably competitive return growth to shareholder value, and sustaining its leadership position as the nation’s first and most experienced security issuer. In fact, every frontier market like Mongolian requires such ambitious goals to be implemented so as to cope with the rapid developmental pace of modern societies. MIK has succeeded on the financial market within a comparatively short period of time. It ambitious goals, supported by secure swift operational performance, sustainable activities, and regulatory compliance are of exemplary importance.
MIK’s operations have demonstrated all these qualities and therefore undoubtedly has earned the true status of major player in the Mongolian economy.
MIK has recently gained a secure and prosperous foothold in its climb to the sky-tall peaks of Mongolia’s future development. The company’s current confidence is built on the actual facts and figures.
Some foreigners may still conceive of all Mongolians as bonded to their traditional nomadic livelihood, sheltering in round white yurts in the wide grassland steppes. However, Mongolian’s real inclinations and aspirations are distinctly different from this image. Today’s visitors to Ulaanbaatar will see steel construction frames and commission ready buildings. This is Ulaanbaatar city, future of Mongolia’s capital development, a showcase of metropolitan expansion with high growth potential. With the city becoming a densely populated area by the rapid growth of urbanization, the construction sector is inseparable to the city’s real estate development. New homes are needed, and families must be able to borrow so as to to buy them. To achieve an effective, reliable, and systematic implementation of citizens housing programs using procedures proven worldwide, Mongolia must have a resourceful mortgage company. After years of patient groundwork and intensive nurture of human capital, Mongolia how has such a company in place- MIK.
Within the past two years, MIK has pooled 47,500 household mortgages and bundled them into residential-mortgage-backed securities with a total value of MNT 2.1 trillion. For a sovereign state with 3.0 million inhabitants and a GDP of MNT 17.0 trillion, this is a sizeable figure. Even more significant than these quantitative indices is the carrying asset value. Mr. N.Zoljargal, Governor of the Bank of Mongolia, summarizes: “MIK is developing a new financial instrument in Mongolia”. The emphasis here is on “a new financial instrument”.
Exactly 10 years ago,the Bank of Mongolia and 10 commercial banks founded MIK with the goal of developing the mortgage market in Mongolia. Back then, when even the term “mortgage” was relatively new most of Mongolians, a broad public awareness of the need to leverage housing and homeownership for the country’s development had not yet materialized. The reason was shortcomings in accurate planning, sequential coordination, and regulation. That period was marked both by developers’ supply shortage in delivering ready for-sale housing property and high demand for robust, sustainable long-term mortgage financing to mitigate market risks. It was at this time that MIK was instituted.
While Mongolia’s market size is limited and every undertaking required careful compliance, conditions and timing were conducive to MIK’s purposes. Our company’s leading operations advanced swifly to overcome the lag in following international best practice. With the right regulations in place and effective management, MIK settled its first asset-backed security issuance within two years of its founding.
About five years later the Government of Mongolia and the Central bank began the 8-percent mortgage program for low-and middle-income households, which was both a turning point and and a starting point for MIK’s intensive growth. The company’s most important achievement is the widened mortgage accessibility. Mortgages, previously available only to households with a monthly income of 4.0 million MNT, opened upto to to households with 1.0 million MNT proven monthly income-75% lower. When asked, “What was the biggest achievement that you’ve accomplished so far?” Mrs. D.Gantugs, CEO of MIK Holding JSC and CEO of MIK HFC LLC, simply replied: “Successfully carrying out our work.” Beyond this commonplace reply, however, one will find a definitive influence on the economy, starting with increased affordable homeownership by ordinary citizens in combination with tangible and reliable accumulated wealth, improved financial literacy, and adherence to financial-obligations discipline. Mr. B.Garamgaibaatar, in until recently Chair of the Parliament’s Economics Standing Committee, commented in a interview: “The mortgage program is not only about subsidizing citizens’ welfare, but is more importantly a form of public wealth accumulation.” For instance, four years ago the share of mortgages in the country’s GDP constituted 5.06 percent. Since the start of the program this ratio has been growing steadily, reaching 14.82 percent as of the end of last year. Over the past three years 7 RMBS’s were issued and settled with a total value of 2.1 trillion MNT, forming a pool of future funding.
Clearly, a single company’s operational performance, however excellent, makes limited contribution to the revival of the country’s overall economy. Nevertheless, early in the recovery and the resurgence of demand in public housing policy directed to the citizens needs, MIK’s responsible, reliable and profitable performance has unarguably made a considerable contribution to the Mongolian economy. Presently about 68,000 households are willing to take advantage of the affordable mortgage program and have started saving their cash,accumulating mortgage down payments. A further 31,000 households were observed to have already maid partial down payments. Given such an outlook of increasing demand, a strong financial backing is essential. In addition to its financial sustainability and development of assured profitability, MIK’s decision to become an publicly traded company was a significant way to strengthen its corporate governance. Last December, the company was reorganized into an open joint-stock company whose shares began trading on the Mongolian Stock Exchange. MIk also became the first company ever to be ranked in the Tier 1 classification of all listed companies.
Since its first activity ten years ago, with its inception of a new financial instrument in the housing market, MIK has now gained a firm financial foothold in the Mongolian economy. The company’s long-term vision for the coming 20 years is focused on maintaining its leading status, honoring the trust of shareholders and bond investors, adding sustainably competitive return growth to shareholder value, and sustaining its leadership position as the nation’s first and most experienced security issuer. In fact, every frontier market like Mongolian requires such ambitious goals to be implemented so as to cope with the rapid developmental pace of modern societies. MIK has succeeded on the financial market within a comparatively short period of time. It ambitious goals, supported by secure swift operational performance, sustainable activities, and regulatory compliance are of exemplary importance.
MIK’s operations have demonstrated all these qualities and therefore undoubtedly has earned the true status of major player in the Mongolian economy.
