As Mongolia continues to experience rapid GDP and population growth, the availability of affordable mortgage financing for people seeking proper accommodation in Mongolia is in high demand. Similarly, as Mongolia’s financial system deepens, housing finance emerges as an increasingly important part of the maturation of its financial system. In emerging markets, the maturation of financial systems appears to lead to the development of housing finance, and this deeper, more extensive financial system, in turn, contributes to higher rates of growth.
However, while the need for housing finance in Mongolia is obvious, the 40,000 homes project illustrated the country’s lack of a fully developed and reliable mortgage system. Many banks in Mongolia simply do not have the financial expertise to offer attractive mortgage loan packages or even provide the liquidity and the necessary legal framework to deliver the loans. Consequently, Mongolia’s mortgage market faces a variety of structural and procedural issues that must be resolved before ordinary Mongolians can have access to financing for house purchases and in turn contribute to Mongolia’s economic growth.
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