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  • 🤔 QPay IPO vs Most Money IPO | Business environment | # of registered entities

🤔 QPay IPO vs Most Money IPO | Business environment | # of registered entities

🆚 Mongolian Fintech Companies’ IPO

December 11, 2023 • Estimated Reading Time: 8 minutes

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Brrr! Brace yourselves, expats in Mongolia! Starting today, the average temperature plunges to a teeth-chattering -18°C. Stay warm and enjoy the unique beauty of a Mongolian winter. ❄️

In today’s edition

  • Mongolian Fintech Companies’ IPO

  • Entity Growth Slowed by Low Activity Rate

  • Unfavorable Business Conditions

Let’s dive into the details.

🆚 Mongolian Fintech Companies’ IPO

Mongolian fintech companies raised ₮14.2 billion in their IPO. What was interesting about these 2 IPOs?

  • Brief overview, MOST Fintech, which introduced the first fintech service in Mongolia, and Innovation Investment, facilitating daily finances with QPay services, conducted IPOs the previous week.

Went Successful

Innovation Investment raised ₮8.3 billion while MOST Fintech raised ₮5.8 billion. Interestingly, they were listed on 2 different exchanges.

  • 2 stock exchanges: MOST Fintech is listed on the Ulaanbaatar Securities Exchange, the first private exchange in Mongolia, while Innovation Investment is registered on the Mongolian Stock Exchange (MSE).

In-Depth Analysis

The two companies share a common focus on providing financial access through cost-effective e-payment systems, although they differ in their approaches. Innovation Investment specializes in QR services that enhance connectivity between businesses and financial institutions. At the same time, MOST Fintech, through its Most Money app, offers a broader spectrum of financial services in addition to QR capabilities. Further insights about finance,

  • Like a roller coaster: MOST Fintech reported a revenue of ₮5.9 billion in 2021, the highest figure since 2019. However, prior years witnessed an average income of ₮1 billion, resulting in a retained loss of ₮724.3 million in 2022.

  • Outstanding growth: Innovation Investment achieved remarkable growth, evidenced by its 2022 revenue reaching ₮6.3 billion, a 15.6-fold increase from 2019. Consequently, retained earnings for 2022 reached ₮2.7 billion, primarily sourced from QR code stickers from businesses and connections to the QPay system partnered with commercial banks and businesses.

In conclusion, fintech companies recently initiated their IPOs in the Mongolian stock market, achieving successful closures. 

DATA STORY: 🥶 Entity Growth Slowed by Low Activity Rate

The total number of registered entities increased by 8.3% year-over-year, reaching 253,400. Among these entities, only 36.9% are currently active, while the remaining 63.1% have either not begun operations or have been temporarily or permanently closed. 

🤔 Unfavorable Business Conditions

Mongolia encounters challenges in its business landscape. Specifically, the overall evaluation of the business environment declined by 8% from 2020 to 2.68, indicating a less-than-ideal situation.

  • Research: The Mongolian Business Environment-2023 study, a collaboration between the National University of Mongolia and MNCCI, surveyed 4,606 enterprises. Participants rated the business environment on a scale from 1 (very bad) to 5 (very good).

Taxes = Headaches

The main issues are related to money. When you check out the business environment in different sectors, the tourism sector has the most difficulties, while the information technology sector is doing the best. This evaluation considered 109 smaller aspects grouped into five categories.

  • A bit more detail: Management, organization, and efficiency indicators are a bit better than the rest. It looks like entrepreneurs are working on things they can control.

  • Here's the big problem: The government system in Mongolia and the money indicators are rated the lowest. Taxes are also causing headaches. Anything that depends on others is tough.

Top Issues

The top three problems for entrepreneurs are high taxes. Specifically, the tax categories and burdens worsened by 19% in the last 2 years. This means the business environment is not great, and various taxes have a big impact. Following that, accessing low-interest credit from international organizations is emerging as a challenge. Lastly, there's an issue with finding the right people to work.

In conclusion, to make things better for businesses, we need friendlier taxes, better laws, and support for certain sectors. The government needs to keep a closer eye on its decisions. This is the only way that the operations of 79.8 thousand enterprises in Mongolia will get better.

🏃 QUICK STORIES

Dribbele

🔵Virtual asset trading dropped to ₮110 billion in Q3, a ₮15.1 billion decline from Q2. However, the market value rose to ₮287.8 billion, with 209 domestic and 170 foreign assets traded. In addition, the number of customers increased to 917.9 thousand.

🔵Khan Bank (KHAN), a leading Mongolian commercial bank, to issue the first-ever domestic Green Bond to raise ₮17 billion. Orders for the bond open today, offering 170,000 units with a par value of ₮100,000 each, a 36-month term, and an annual interest rate of 16%. Therefore, BDSec (BDS) is the main underwriter of the Green Bond.

🔵 Mongolia achieved a record-breaking vegetable harvest this year, exceeding all domestic needs for potatoes and fulfilling 85% of vegetable demand. This success is attributed in part to the ₮114.0 billion in concessional loans provided to the agricultural sector. In particular, farmers harvested 175,000 tons of potatoes and 185,000 tons of vegetables, exceeding previous records.

🔵The total number of customers of non-banking financial institutions (NBFIs) in Mongolia decreased by 15.4% from last year, reaching 4.1 million. This decline led the borrower base to shrink 11% to 1.4 million. The average loan size provided by NBFIs sits at ₮2.3 million. Currently, there are 521 operating NBFIs, with 496 having domestic investment.

⭐ TOP NEWS

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Editor: E.Zolbayar
Writer: M.Khulan & Skh.Angirmaa & G.Aminaa

Disclaimer: The information Inside Mongolia provides is for educational and informational purposes only. It is not intended to be or constitute financial advice, trading advice, or any other advice. The decision whether to consider the information we provide is solely our readers' independent decision.