1. SME Survey in Mongolia - First Results Finance, Investment and Taxation

2. Mongolia SME Observatory Results The following slides summarize the responses of 1511 SME interviews conducted by staff of the SME Department of the Ministry of Labour of Mongolia in September 2014. A large number of cross tabulations is possible, but for this presentation, we have chosen in most cases to provide two slides for each question asked: One which shows the variations for three “super regions” representing groups of regions (aimags) and districts of the capital city Ulaanbaatar; One which show cross-tabulation based on education of the proprietor, number of people employed/engaged in the SME, sector etc.

3. Mongolia SME Observatory Results We asked SME owners how they financed their start-up. Was it self- financed? Did they access funding elsewhere (outside the family circle)? Do they have joint ownership? We then asked if they have external financing for running costs and capital investment now, also, whether leasing is of interest. After that, we looked at who is registered for tax – and who actually pays it.

4. Mongolia SME Observatory Results As with many other jurisdictions, SMEs are usually financed by the owner at start-up, but with support rom family and friends. There are issues of access to seed/start-up capital, but many owners, in spite of these difficulties, managed to access debt finance and continue to use debt financing for coverage of both short-term/current needs, as well as long-term. However, much of this may be outside the formal banking sector: furthermore, there is little use of leasing at this stage. In relation to taxation, a number of our respondents were not registered for tax and even those that are, do not always pay it. This is particularly true for VAT, the reform of which is a current priority for the Ministry of Finance.