Lending and Government Financial Support for Small and Medium-Sized Business in Mongolia

Effective functioning of the economy of any country (including Mongolia) in modern conditions is not possible without the participation of small and medium-sized businesses (SMEs) in this process. In developed market countries, its share in GDP production is more than 50 %. However, Mongolia is one of the developing countries, and its economy has a high degree of uncertainty and risks, which constrains economic growth. Running a business requires cash and capital. The economy of any country develops from the activities of micro, small and medium-sized businesses, incomes grow, taxes are paid to the country's budget, and GDP increases. For this purpose, government agencies, ministries and the Agency for the Development of Small and medium-sized businesses investigated the statistical analysis of loans issued and loan repayment by commercial banks in the absence of sufficient loans to support the activities of small and medium-sized businesses. The article examines the financial and monetary problems of Mongolia's enterprises related to working capital and borrowing from investors. There has been a clear decline in lending to small and medium-sized businesses over the past 5 years. This is due to difficulties in obtaining loans from commercial banks in Mongolia. Proposals have been formulated to improve the functioning of Mongolia's banking system and increase government support for small and medium-sized businesses (tax incentives, business awareness, assistance in entering international markets, and the use of a protectionist strategy).