Asset-backed securities (ABS) have emerged as the fastest-growing financial instrument in Mongolia's capital market over the past two years. The market began modestly in 2021 with an inaugural public offering worth just ₮4 billion. Today, 30 ABS offerings totaling ₮589.4 billion have been issued across three domestic exchanges. Notably, 58 percent of this total—₮340.5 billion—was raised in 2025 and 2026 alone.
Growth Drivers and Market Indicators
During the market's initial three years (2021–2023), 10 ABS offerings raised a combined ₮128.9 billion. Over the subsequent three years (2024–2026), issuance accelerated sharply, with 20 offerings raising ₮460.5 billion. Average transaction sizes have expanded significantly as well, rising from ₮15 billion per issue in 2022 to ₮24.4 billion in 2025. To date, 17 non-bank financial institutions (NBFIs) have issued ABS, supported by 10 underwriting firms.
Traditionally, NBFIs relied heavily on their own equity, commercial bank credit, and foreign loans to fund their lending operations. However, bank loans come with steep interest rates, strict collateral requirements, and short maturities.
Securitization through ABS offers an efficient alternative. By transforming existing loan portfolios into immediate liquidity, NBFIs can quickly reinvest capital to originate new loans. This process accelerates asset turnover while allowing non-bank lenders to raise cost-effective funding directly from thousands of retail and institutional investors at once.
Repeat Issuers and Investor Yields
The growing list of repeat issuers reinforces the success of this structure. Several leading NBFIs have returned to the market multiple times:
- Bichil Globus Finance & Bers Finance: 4 issues each
- InvesCore & Omni Capital: 3 issues each
- Simple, GSB Capital & Numur Credit: 2 issues each
Overall, 20 of the 30 total offerings originated from repeat issuers—a clear indicator that securitization reliably delivers working capital for NBFIs.
| Metric | 2021 Inaugural Issue | 2025–2026 Issues |
| Annual Yield (Coupon Rate) | 14.4% | 18.0% – 20.0% |
| Average Maturity | 24 months | 24 months |
| Payment Frequency | Regular intervals | Regular intervals |
For retail investors seeking higher returns than traditional bank deposits without navigating stock market volatility, ABS has emerged as an attractive alternative. Its short duration and high yields make it an ideal "first step" into Mongolia's capital market for the general public.
The SPC
At the core of every ABS transaction is a Special Purpose Company (SPC). By isolating the underlying loan pool from the issuing NBFI's primary balance sheet, the structure ensures that collateral is held exclusively for the benefit of security holders.
Furthermore, because these portfolios comprise thousands of micro-loans overcollateralized beyond the bond's face value, individual defaults have a negligible impact on overall cash flows.
Although Parliament passed the Law on Asset-Backed Securities on April 23, 2010, the market required an 11-year period before its first public offering in 2021. Translating legislation into active deals required time to cultivate technical expertise, underwriting capacity, and public market trust.
Exchange Distribution and Trading Volume
Today, public ABS issues are distributed across three trading venues:
- Mongolian Stock Exchange (MSE): 17 issues | ₮316.9 billion
- Ulaanbaatar Securities Exchange (UBX): 6 issues | ₮168.0 billion
- Chinggis Khaan Exchange: 7 issues | ₮104.5 billion
The asset class has become a vital liquidity engine, particularly for newer trading platforms. The Chinggis Khaan Exchange selected an ABS as its inaugural listing in 2024. Meanwhile, UBX captured 75 percent of all ABS issuance value in 2025. In the first three quarters of 2026, securitized products accounted for 82 percent (₮67.8 billion) of total trading volume on UBX.
UBX currently lists issues for several major programs, including Simple, Ochun One, GSB, GSB Two, NetCapital, and CEC Aya One ABS (full listing terms are available at www.ubx.mn/list).
Key Risks and Future Outlook
While offering attractive yields, ABS is not a risk-free investment:
- Credit Risk: During economic downturns, if a significant number of borrowers within the pool default on their loans, interest payouts and principal repayments could be impacted.
- Liquidity Risk: Selling before maturity may prove difficult if secondary market liquidity is low.
- High Yield Reflects Risk: Higher interest rates of 18–20 percent reflect the underlying risk profile of the asset class.
- No Deposit Insurance: Bank deposit insurance schemes do not cover ABS securities.
Therefore, prior to investing, investors should thoroughly review the offering prospectus, loan pool quality, structure, and issuing NBFI's financial statements, as well as consult a licensed broker.
The expansion of the ABS market demonstrates a meeting of two clear needs in the capital market: NBFIs seeking funding and investors seeking consistent, higher yields. Looking ahead, further growth will likely expand into securitizing residential mortgages, leasing contracts, and trade receivables, further deepening Mongolia's financial landscape.
(Disclaimer: This article is for informational purposes only and does not constitute formal financial or investment advice.)
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