1. Country Highlights Mongolia NHB-APUHF International conference 30/Jan/ 2012 Enkhbayar Tsedendorj

2. Content Mongolian housing market growth – Mining town Housing development Mortgage market overview Potential development of Mortgage market Development of Secondary mortgage market and MIKs function Conclusion

3. Housing Areas: 3 Ger area Source: Mongolian 2010 Census Population 2,75 million, Total # Households-714,000 45% of them in Ger including 33% urban households Urban- 67%; Rural 33% Ger and Housing, % Urban: 33:67; Rural: 71:29

4. Mongolian housing market growth Over the 20000 units under construction in UB alone The volume of housing units per year will have to be at least 10,000 to meet demand, including the mining towns Source: MRTCUD Housing supply, by thousand sq m

5. TSETSII Mining Town Housing development in South Gobi, TsogtTsetsii soum, by Energy Resources Company Area: 21 hectare 1648 flats for mining workers Social and physical infrastructure facilities will be provided Source: ER, MCS property

6. Current Housing Development

7. Ulaanbaatar city

8. Country side picture-1

9. Country side picture-2

10. Country side picture-3

11. Mongolian Ger

12. Country side picture-4

13. The strong growth of banks begun in 2004 has resumed Source: BOM and TDB

14. Mongolias strong GDP growth will drive strong loan growth Source: IMF and TDB

15. Mortgage lending in Mongolia will grow dramatically The sources are BoM, IMF, MIK TDB

16. Providing Home ownership to more and more Mongolians Source: MIK and TDB

17. Mongolian mortgage market overview(1) Market indicators 2005200620072008200920102011 Mortgage market debt outstanding (billion MNT) 30,8 74,3 164,6 218,0 226,0 333,7 656,5 Mortgage market share of Systemic Loan market, % 2.3%3.3%8.0%8.3%8.6%10.7%11.64% Total Debt Outstanding Per Borrowers (million MNT) 6.4 8.3 10.0 13.2 13.6 16.9 24.8 Numbers of Total Borrowers, thousand 4,7 9,0 16,4 16,5 16,6 19,7 26,5 Market I.R /Ann, %/14.7%17.8%16.0%18.7%17.7%15.7%16.9% * Source: Monetary Policy and Research Department, Bank of Mongolia NPL % Mortgage loans-0,45% MIK portfolio-0.0% Mortgage Standard: LTV <70% DTI>45%

18. Mongolian mortgage market overview(2) * Source: Monetary Policy and Research Department, Bank of Mongolia

19. Housing Price Index, by 6 districts of the Capital city * Source: Bulletin of National Statistic office **Note: Statistical substitutional methodology has been used on some apartment price data.

20. MONGOLIAN MORTGAGE CORPORATION Established 06.09.2006 + Why we established MIK – Increase the affordability of the housing loan – Stable structure for long term financing – Liquidity facility – Increase in housing mortgage market – Need for capital market development

21. Mission statement Promotion and development of primary and secondary mortgage markets By raising medium to long term funds on domestic and foreign capital market Through a series of capital market tools to create and ensure smooth functioning of long-term financing system To promote affordable home ownership and urban development for Mongolias people.

22. Purchased 10 Mortgage pools MIK issued Covered Mortgage Bond in 2009 -9,7 Bln MNT, 2, 3.5, 5 years, 14-14.5% Got an approval from the Financial Regulatory Commission to issue 25 bln MNT bond ; Mortgage Legal and Regulatory framework – Mortgage standardization and Documentation - IFC and KfW, EBRD – Mortgage law July 2009 – Asset based security law April 2010 – Shelf registration, OTC procedure Listed as a repo financing instrument under Central Bank of Mongolia Capital increase, offering equity investment to potential investors 22 МIK OPERATION

23. Cooperation and recent development Cooperation with IFC, KfW, USAID, APUHF, EBRD – IFC: 2 Small TA-Mortgage toolkit adaptation and Housing micro finance – KfW: Loan and TA project through Government FSM – USAID: Legal framework and Mortgage bond Guarantee 50% – Wharton school International HFP, Hofinet data : – CAGAMAS

24. Conclusion Considerable housing needs to be built in Mongolia Mongolian mortgage market is developing rapidly Secondary market development will be essential Foreign investors in covered bonds or mortgage backed securities will be needed MIK, with strong local and international support, is poised to create quality investment instruments Investors in the housing market, as well as the secondary mortgage market are welcome

25. THANK YOU Mongolian Mortgage Corporation LLC /MIK/ MIK Building, United Nations street-38 Chingeltei district-4, 15160 Ulaabaatar, Mongolia www.mik.mnwww.mik.mn, info@mik.mninfo@mik.mn Tel: (976) 11-328267 Fax (976) 11-313338 25