ANAR Amarjargal, COO of Mongolian Mortgage Corp., On Raising $300M Bond On Int. Capital Market for Mongoliai
Interviewed by Batzul Gerelsaikhan and Oyungerel Munkhbat, Photos by Suniko.
Get to know Anar Amarjargal (Hobby: 1996-2001), the COO of Mongolian Mortgage Corporation (MIK), which raised $300M bond on international capital market for Mongolia. Anar is also the Independent Board Member of Mongolian Stock Exchange, and Executive Director of Amarjargal Foundation in Ulaanbaatar, Mongolia. Previously, Anar worked at Novel Investments Limited, SkyPath Partners LLC, XacBank and MCS Coca Cola. Fluent in Mongolian and English, he has a bachelor's degree in Economics from University of Colorado at Boulder, USA.
Full name: Anar Amarjargal
Hobby Alumni: 2006 (years attended 1996-2001)
Higher Education: Bachelor’s degree in Economics from the University of Colorado at Boulder, USA
Sector(s): Banking, Finance, Consulting, Charity
Current Workplace: Mongolian Mortgage Corporation HFC, Mongolian Stock Exchange SOE, Amarjargal Foundation NGO
Past Workplaces: Novel Investments Limited, SkyPath Partners, XacBank, MCS Coca Cola
Languages: Mongolian, English
Countries Lived In: Japan, Mongolia, UK, and United States
Frequented Website: www.theverge.com, www.zgm.mn, www.economist.com
Current phone(s): iPhone 11 Pro Max, Iphone7
3 Apps To Recommend: Outlook app, telegram app, Ubinfo app
3 Books To Recommend: Sapiens trilogy, Why I left Goldman Sachs, Straight to hell by John Lefevre (just for fun)
3 Movies To Recommend: Avengers saga, Birdman the unexpected virtue of ignorance, The road,
3 Songs You Are Listening To Most Right Now: Git Up, Honkytonk Badonkadonk, Come Together
AT HOBBY SCHOOL
1. How many years have you studied at Hobby School and where have you studied before and/or after Hobby?
I was at Hobby School until 4th grade, so probably 1996-2001. I joined Orchlon School after it just opened.
2. What kind of a student were you?
“My high school friends told me that I was a douchebag because I used to force kids to stand in a line and wash their hands before eating lunch! [laughs]. I was the class President, you see. I pissed-off a lot of the other kids, but the teachers loved me.”
In terms of academics, I wasn’t the best in class, but I wasn’t the worst either, like B+? At Hobby, I used to love doing homework, but as I grew older that changed [laughs].
3. Why? Did Orchlon spoil you too much? Anything you’d do differently if you could change your past?
No! It was more to do with teenage hormones [laughs]. If I had the power to change anything in high school, I wouldn’t change a thing. High school was one of the best times of my youth.
4. What’s your fondest memory of Hobby and who was your favorite teacher?
Hmm, everyday was nice! Hobby taught classes in a more democratic way, not like the soviet style of teaching, but more of letting us grow on our own. My favorite teacher was Jean Claude who used to teach geography. I like him the most, because he taught us how to be adults.
I remember that I liked birthdays where we celebrated at each other's houses, but the fondest memory would have to be that time when a couple of my classmates went to the backstage of a theatre during school hours and we climbed to the top. We got into so much trouble and I remember our Principal Oyuntsetseg calling us into her room and scolded us for that. It was fun though!
5. What influenced you to choose University of Colorado at Boulder, USA?
I decided to go to the University of Colorado because it was ranked the best party school, 5 years in a row! Unfortunately, when I got there it no longer held that status. I am not sure what happened. Anyways jokes aside,
“I never wanted to apply or go to an Ivy League school, because it was not for me. I felt that they would be snobby. I didn’t think it would be the right style of education for me. ”
Colorado was flexible, people were relaxed and their approach was lenient, like “You’ll get it. Don’t worry. '' Most importantly, there was a professor that was the leading advisor to the UN, on intellectual property. I was interested in intellectual property because it basically values an idea that doesn’t have a physical form yet, and putting a legal framework around it, etc. You can use it as collateral at a bank and get a loan, and this was really interesting to me back then.
6. Why Economics major for your bachelor?
I chose economics because of my father, he is an economist. I wasn’t really interested in economics at first, but during my second year, I started to get interested in it, because economics teaches you that every resource on earth is limited, whether it is time, commodities, money, etc. and economists’ job is to find the best way to allocate these resources.
Especially, in my senior year, I picked a critical thinking class and our professor asked us to connect economics to a critical issue that we cared about. I chose “abortion” because my school had a big “pro-choice” rally and it motivated me. My conclusion was that it doesn’t matter if you are an economist or not when it comes to emotional topics such as abortion. I didn’t like the fact that a personal decision was being reduced down to quantitative results that can be weight. I am “pro-choice”, you see.
7. Did you get a scholarship for your bachelor’s degree?
“I got a scholarship for my first and second year from Post Bank, a local bank. Unfortunately, they went bankrupt, and I lost my scholarship, but I made it through.”
8. Didn’t you want to do Masters or MBA?
Now, I am. I want to do business administration MBA, because I want to learn to manage people and understand the basic principles better.
9. Was America your first foreign country after Mongolia? How different was it for you?
No, I lived in England for a year and in Japan for 1 year. These countries were nice. They had their highways, supermarkets, skyscrapers, etc., but I am inexplicably drawn to Mongolia. For instance, I was actually offered to work at KPMG Singapore after my graduation, because they were planning to open an office in Mongolia and they wanted a local on staff, but I declined and I came straight home.
Coming back to Mongolia, a lot of my friends say they had culture shocks, but for me, it felt home. In the US, I felt like I was living in someone else’s skin or some place that I didn’t belong. When I came back to Mongolia, I felt right.
10. Why would you decline KPMG Singapore?
Because it was 2011, Mongolia was the country with the highest GDP growth in the world and I felt like I was missing out. Unfortunately, this boom ended when I got back to Mongolia, just like Colorado no longer being the best party school when I got there. I don’t know how to feel about this. I am adamant about staying in Mongolia till it booms again and get out of this rut.
CAREER
11. What was your first paying job?
I used to burn CDs, and work on photoshop to build websites in high school. But, if you are asking about a tax-paying jobs, then it was at MCS Coca Cola where I interned for the summer and I was responsible for the Sprite and Minute Maids brands. My work was at the edge of the city, and I used to wake up at 6am to commute. My time there was just awesome, because the people and the environment were all great and I could drink all the Coca Cola I wanted.
12. Where did you apply for work when you graduated?
“I sent out my applications to all the banks and got callbacks from Trade and Development Bank of Mongolia (TDBM), Khan Bank, and XacBank. I think it was mainly because of my English. ”
TDBM told me I had to come in as a teller and work my way up, with no special treatment. Khan Bank said they’ll provide me with a favorable loan condition if I became an employee, and a position in their policy department at their headquarters. XacBank offered me a place in their risk policy department also in headquarters. Khan Bank’s salary was higher so I was actually going to go to Khan Bank but one of the executives at XacBank called me for lunch and straight out said “Don’t work at other banks. Work for us.'' He was very direct and seemed extremely knowledgeable, so I said OK.
At the time, I thought he was going to be my mentor at XacBank. But after 2 months, he transferred to Tenger Finance, so I lost my mentor. But I stayed at the bank for 2 years and it was really fun. I began as a Risk Officer and became a Risk Policy Officer. Risk was not something I was interested in, but it turned out to be very interesting. Preventing risk is a difficult task, so we never say “eliminate” risk but rather “mitigate” it.
13. There are 13 banks in Mongolia, what makes XacBank different from others?
I believe it is their shareholder structure - IFC, ORIX Corporation, EBRD, National Bank of Canada, Ronoc Partners, etc.. It’s very diverse, which gives a lot of foreign know-how to the bank.
“XacBank doesn’t have a foreign CEO, which is good, because a person who understands Mongolia and Mongolian culture runs the company. However, their strategy and policy are based on experienced international knowledge. ”
14. What’s the difference between having a foreign or a Mongolian CEO?
Having a foreign CEO is not bad. Look at Khan Bank, it is at its most profitable stage compared to how long, I don’t even remember.
“The issue is that when foreigners come to Mongolia or a company, they tend to bring their “one size fits all” approach. But Mongolia is a small country (population wise), hence things need to have a bit of “fine tuning” to make things work. ”
Having a tailored touch to any product for any company is actually better for the people and the companies themselves.
15. There are so many NBFIs, SCUs and private loan sharks in Mongolia. Why is that?
The entities you mentioned are regulated by the Financial Regulatory Commission (“FRC”) and the banks are regulated by the Bank of Mongolia (or the Central bank). Their jurisdictions are different, mainly because the central bank restricts crossover activities. In other words, they don’t allow banks to infiltrate that portion of the market. If the banks could, I think they would. But doing so would divert away from all the success they’ve made, all the structure and foundation they’ve built.
Current NBFIs and loan sharks, are not helpful to the system. But the thing is, the demand is there. There are certain methods where their dominance can be decreased. An example would be the credit cards that all the systematic banks are giving.
“People go to NBFIs for fast and small amounts of money. So credit card is the best way to solve these problems. ”
Once the usage becomes popular, people will use credit cards often than opting for NBFI’s quick loan. This would force the NBFIs and loan sharks to decrease their interest to compete.
16. Do you support the idea of international banks coming into Mongolia? Why is it so hard for international banks to stay or open their offices here?
“I don’t support a foreign bank coming into Mongolia, because it doesn’t solve the problem that most people think it will solve. People believe that interest will go down. It will not.”
I mean foreign banks are for-profit business. So when they operate here, they’ll do their research and provide interest rates that makes the most profit to them. They are not going to provide us with lower interest rates just because they can.
The thing I do support is, Mongolian banks being shocked, a threat to their environment so they can up their game. A foreign bank coming in could be a threat. If you think about it, Mongolian banks are not that far behind. We are advancing, but it could be better, starting with international payment systems. I mean currently the most reliable bank that provides international payment services is TDBM, this in an environment with 13 banks.
17. Asia Pacific Group (APG) on Money Laundering gave their 3rd report on anti-money laundering and counter terrorism and its 2017 report showed that key vulnerabilities in Mongolia included the banking sector. There were 35 trillion MNT in Mongolia, which was 1.5 times more than our GDP, which is a proof of money laundering in Mongolia and basically our tax authorities are not taxing these grey economies. APG gave us a deadline of 2019 September to fix all the red flags or we will be blacklisted. Do you think we did enough?
Has there been improvement? Yes. Have they materialized? Not yet.
The central bank started teaching about anti money laundering processes to banks from 2 years ago. They also tried to give lessons to the government and non-banking entities. They’re trying. But the last time I asked about the results, my friend said that despite some progress, it’s still not meeting expectations. Basically the people who have to comply with this are not really taking it seriously enough. It’s not only the banks. The banks and the tax office have to do this. So if the tax office has to do it, private companies have to do it as well. Money laundering is not only transactions, it is also personal reporting. From that report, the main question was: Where is all the money coming from? Why isn’t that money taxed?
“Mongolia is a nomadic country. Herders, taxi drivers, singers, etc. - do they get taxed at all? What value do you put on a 3rd generation Khuurug? From the artists, I can think of only the rapper Gee who actually pays taxes (I may be exaggerating).”
Back hand deals that take place in our economy is abundant. Look at Narantuul black market where most of the cities population goes to shop, they tried to implement the VAT printing out receipt thing. It didn’t work, so instead the sellers just tell the people two prices: One with VAT and the without. Which would you choose?
Aside from the cons, changes are being made. Compliance departments at banks were not a thing. It is now. They didn’t have it because they didn’t know what to do. But now, almost all banks have these departments and their job is to make their transactions and operations comply with these regulations and report unclear transactions. They’re developing and it takes time.
18. After XacBank, you founded SkyPath Partners, a consulting and private investment firm, when you were just 24 years old. You recruited me from PwC, Alex Kim from McKinsey Hong Kong and Andrew Chung from Daewoo Securities to work at a start-up in Mongolia! How did you manage that? Are you the secret master of headhunting?
[Laughs] Well at that stage, the idea that the company was built around was perfect. The economy was heading to a recession and there is this concept called “vultures”. It has a bad reputation because it deals in difficult times, but it can have very positive effects on the economy. SkyPath’s idea was to bring in investors when capital in Mongolia was deteriorating and then invest in these companies at cheap price, consult them on improvements, and exit at a higher valuation in better times. This usually works in other countries. In Mongolia, it kind of didn’t.
19. Can you tell us what happened?
I think the main thing was that we implemented an idea that wasn’t customized to Mongolia and our priorities to that effect was neglected. I don’t put the blame on the CEO or anyone else. Like I said before, things have to be customized to Mongolia to work. Back then, I was very young and inexperienced. I looked to these professionals for more advice rather than giving them guidance on Mongolia. I blame myself for that.
It took about a year to find all these people. It took a some wining and dining. You had to convince them of the idea that Mongolia was profitable. I told you it was like the Wild Wild West. Anything was possible.
20. But Cameron McRae was almost a local, and he was the CEO of Oyu Tolgoi. How was it to work with him?
Actually, he had a huge influence on my career. His problem solving skills were amazing. He just drew a big picture of all the problems, highlighted their priorities and brainstormed them one at a time. The thing is, he was a mining and management person. The other people were from a finance background. So it was very hard for these 2 sectors to understand each other. I think that was a big disability of the company.
21. We actually had a choice of hiring a Mongolian or a foreign CEO. Do you think we would have succeeded if we picked a Mongolian CEO?
Probably. SkyPath didn’t have a firm foundation or an existing cash flow of businesses in Mongolia, so the foreign side was more interested in the big money deals. If it was a Mongolian CEO, he would’ve probably captured that the company needed a stable source of cash flow so that we can go after these big whales later. I think that would’ve made a difference.
22. What was the biggest obstacle when you were starting up a company?
The biggest obstacle was translating an already developed standard of running a business and compressing it down into a startup. It didn’t work. Being a startup, you have to be very flexible. SkyPath tried to be flexible, but it always thought that it was going to be much larger. So everything was planned and put in place for it to become a bigger organization. I think that was the biggest challenge. We did overcome it because it was a small space and we could just talk it out. But then, I don’t want to say SkyPath failed, I want to say it was ahead of its time. The idea was too early.
Also, it was understanding what my role was within a company, in order to add value. I couldn’t just be a normal employee and do whatever the company needs. So understanding this role for each of these companies, understanding how to get there faster was the biggest obstacle. Once you know that, you feel more comfortable with your job, any job.
23. Our firm had to close shop in Mongolia. How was that process for you?
“It was painful. When your company is going bankrupt, you have to understand who to take care of first. There’s limited resources to actually allocate. But there are actual people involved and laws that you have to follow. ”
So it was painful to allocate these resources. After that, things were kind of easy, just freeze the accounts, get an audit done, then take it down. It was one of those I-want-to-cry types of pain. But I won’t hold back from trying again. It was definitely a good experience. Maybe we’ll try it again.
Batzul: Let me just put it this way. Everybody in the team believed in the company, 100%. Just to give an example. They gave me 3 package offers. First was “poor salary and high bonus”, secondly “medium salary and medium bonus”, or “high salary and small bonus”. I picked the poor salary and high bonus, because I believed in our team. Everyone was so qualified, but sadly it didn’t work out.
24. You joined Novel Investment after SkyPath Partners. What did you do there?
I joined Novel Investments because the idea that company wanted to pursue was intriguing. They wanted to create the first investment fund where they invest in unconventional investment, or opportunistic investments. One of the things we tried to purchase was the Galleria building next to the Parliament. We crowdfunded up to a decent amount. The idea was sound, the company distributed these physical notes that could be converted into equity of the company at a later date. They drew in the funding and used it to invest.
25. Then what happened?
Oh, Tavan Bogd got it for 24 billion MNT.
26. You talk to many investors. In your opinion, why should anyone invest in Mongolia?
The safe answer is high returns. It’s not the highest, but it is relatively high compared to their own countries. But the main reason is actually a point you (Batzul) made, investors fall in love with Mongolia and understand the country more. Obviously high returns are important.
“Why invest in Mongolia? Possibility for great turnouts, cheap labor, acceptable margins, risk, it’s only risky if you don’t know the country (so get a good partner who knows Mongolia and that can be eliminated), and the other thing is, it’s a great place to be. ”
27. What are your thoughts on the Mongolia’s competitive ranking in the world? How can Mongolia improve its competitive index?
“Infrastructure is the base to all, so Mongolia’s competitiveness is not that we’re unable but because we’re lacking the resources to be able to do those things. For example, in exporting and importing, our competitiveness fails at the railroad. We have only one.”
Competitiveness in production let’s say, we have the resources but we import the resources. Energy and transportation wise, we’re lacking. Basic infrastructure is the most important thing and I think we need to invest in that before anything else. Once these things are in place, there isn’t much holding Mongolia back in terms of competitiveness. Mongolians are smart.
28. What needs to happen in order to develop Mongolia’s institutional investors?
Local ones? These institutions like pension funds and wealth funds need to do long term investments in policy projects or mega projects, instead of retaining their funds for the state budget. If Mongolia’s financial sector has this concept of long term money, it’ll actually help a lot in decreasing interest rates and risk, and boost stability.
For foreigners, I don’t think they’ll put in long term money into Mongolia if the foundation is not there. If Mongolians themselves are not taking the long term risk, why would foreigners?
29. In Hong Kong, people choose the funds to invest their pension taxes in. Should Mongolians do that?
It’s a touchy subject because the concept is in its infancy to Mongolia, especially pensions. People are having a hard time getting their pensions. If you told these people they could put their money into private companies which will invest and make you more money, I don’t think they’ll believe it. Unfortunately, the people handling their pensions aren’t doing a great job either.
In my opinion, private companies should start doing this internally. XacBank did this when I was there. Every time I get a salary, a certain portion is given to the Bank and they would match it then invest. After a certain period, maybe 4 or 5 years, they would give it to you. This practice is sound. So the company takes a small portion and invests, so if they get good returns, you’ll get good returns as well. That’s a structure that private companies can start using to get people more aware of how efficiently their pensions can be invested.
30. You are also the current Independent Board Member of Mongolian Stock Exchange. What kind of impact do you have at MSE?
I joined MSE since March last year. The MSE’s business plan is to be self sustaining, trying not to be a burden on the state budget, so they’re focusing on getting these new products on the MSE. There are some regulations and new products. They wrote the relative regulations, and it is up for approval at the FRC. If this happens, not only will you see company stocks up for grabs, but fund investment opportunities as well, and you can trade positions within your funds.
So let’s say there’s a fund that’s created only to invest in FinTech, like in LendMN and Gereg, and their portfolio becomes strong and very profitable. You will be able to purchase some of the equity of that fund, and trade it. This is more interesting and understandable. They are trying to improve it, but it’s taking time.
31. MSE was founded in 1992 to implement the government’s privatization program. How is MSE doing now in 2019?
I can tell you that it’s not where it wants to be. There’s nobody to blame for this. It takes time for people to understand these financial tools. Money is a touchy subject, so you need to be comfortable using these tools to interact in the stock exchange.
Most people just want to buy it and forget about it. But for the stock market to be fluid, there needs to be constant transactions, maneuvers and events, which increases or decreases the demand, causing fluctuations. People have to understand this.
32. The capital market should be a reflection of the economy in a truly free market. What steps are required for that to happen in Mongolia?
For developed countries, this sort of thing has been developing for 200 or 300 years. The idea of the company, managing it, owning a portion of it, and trading it. Having tradable indexes that portray a certain sector or a commingled pool on securities that conveys the position of the economy.
People have to get used to trading in this way and trust the message that the market is sending out. Even I’m not interested in investing in Mongolian companies, and holding or trading their stock because it’s very non-liquid. So I just think it is a matter of time. As the middle class increases, they will start searching for better opportunities than their savings rate at a bank.
33. This year, there were multiple successful IPOs in Mongolia - LendMN, Mongol Basaltwool, Erdene Resources’ dual listings, Mandal Insurance, Ard Insurance, Tumen Shuvuut, Ard Credit, Monos Foods and Invescore NBFI. In your opinion, what’s the next step in capital market development in Mongolia?
“For these IPOs, I think it’s a hype. People just got a sense that doing an IPO is the best way to raise capital. ”
But then this should decrease because there aren’t that many new startups. For all this new hype, they can raise capital with an IPO but it depends on how they’re going to perform. That determines the development of the capital market. Like if I invested in Monos this year and they didn’t do well, my confidence in investing in other companies will decrease as well, the opposite is true as well. I don’t know if the market can sustain this rapid growth.
But I can see that maybe focusing on something like ICOs (Blockchain, cryptocurrency IPOs). Would draw in interest after this hype.
34. What do you think Mongolia’s financial market - banking, insurance, capital market and insurance market - will look like in 10 years?
In 10 years, I believe it can be a runner up to those of developed countries. We would have these secondary market firms and institutions, where long term investments would be a reality, the understanding of finance will have seeped into the general population and they will be interacting with it.
35. Please introduce Mongolian Mortgage Corporation (“MIK”) to our readers in your own words?
Well it’s a housing finance company, focused on securitization. We are a secondary market institution that uses securitization to extend the maturity of a debt.
It is hard for banks to give out 20-year mortgages with short term funding from the central bank, so they use us. What we do is take these loans, turn them into securities and give it back to the banks. The banks use these securities to pay off the funding that the central bank provided. What we’re left with is then the accounting service related to security. The Central Bank accepts these securities as payment. This is a way of extending the length of a loan.
36. What is your role at MIK? How many people work here?
I’m the COO. So I handle everything public relations, IT and administration. We currently occupy 2 floors of TDB building, and employee approximately 100 people.
37. How much of your portfolio do you think went to actual ger district people?
The main purpose of this government program was housing in general. The initial plan wasn’t decreasing air pollution. In 2013, this housing program started and at the time the Central Bank decided to participate in an unconventional method of monetary policy, a sort of quantitative easing. They called it price stabilization, it took effect in three sectors and Housing as its main focus. The program, until recently, is still focused on this.
“The regulation has now changed to mainly focus on air pollution and target the ger district people. Basically, focus on first-time homeowners, re-urbanization project, housing of ger area households, and citizens who want to connect to municipal infrastructures. ”
38. Can it be a self sustaining house?
Like green houses? I am not sure, as the standards for off grid self-sustaining has not been documented on Mongolia.
39. How do we reach the people who can’t pay the down payment?
The government is trying to solve that where companies can give a guarantee for the down payment. Basically, you don’t have to give a down payment, but a guarantee from this other companies. Basically what you do is you go apply for the guarantee. This company values your behaviors, credit, and spending, and offers a guarantee for a certain amount. If that amount is enough for the 30%, you can go to the bank and use it as a down payment for the house. I think the product is out. I don’t know if people have used it.
40. We have to congratulate you (and MIK team) for raising $300 million and $440 million respectively on the international capital market!
Thank you.
41. At bloomberg awards, it was said it took you 1.5 years of work to issue $300million bond on the international capital market. How many countries did you fly to to raise this amount?
Okay 1.5 years of work in one go would probably sound like this: First, we assessed our company to see if it was ready. Second, we got our ratings and due diligence work done by the foreign rating and auditing companies. After they gave us the thumbs up, third, we took our pitch book (a document with all our information) and flew to 5 countries over 13 time zones, all within 4 days.
“We slept on the plane, changed in the airport bathrooms, and didn’t take breaks during meetings. After that, I was 20 pounds overweight, sleep deprived, and lost my hair. It was crazy, but in this short amount of time, we met with about 60 companies to raise $300M bond and eventually over a 100 companies invested.”
42. Four companies - Tavan Bogd, TDBM, Mongolian Mining Corporation (MMC) and MIK - went on a roadshow to fundraise and issue their bonds on the international capital market in 2019. Only MMC and MIK succeeded, but the other two didn’t price. Why?
The structure of these two deals are different in themselves and from our’s. Tavan Bogd would have been the first Mongolian retail company to raise bonds from the capital market. TDBM actually has a line where they can draw additional funding. There could be and array of reasons why it didn’t happen but my guess is because of politics and media coverage around each of these companies.
“Investors get spooked easily, especially from a country with a sovereign rating that says invest at your risk. I believe investors were getting scared and they started to demand a price higher than what was acceptable.”
43. What steps did you take to succeed? How many people went on the roadshow?
Four people went on the roadshow excluding the underwriting bank. The key to success is knowing the company. You have to know the company to explain it to investors in a very short period of time in a way that they’ll understand it.
We were actually very lucky. The American side knew the structure as they had Fannie Mae and Freddie Mac. Asians, not so much, but they were a quick study and they did understand.
44. The bond you raised has 9.75% interest rate in USD with a tenor of 3 years, and you buy mortgage for 8% in MNT? How does that work?
No, the proceeds from this bond is not meant for the government loans. It is meant for the commercial rate mortgage loans. So the main bulk of the money will go to banks, so they can expand the market by providing more commercial mortgages.
45. What are your thoughts on mortgage development in Mongolia? Is it still at it infancy level? Where do you see MIK in 5 years?
It is definitely in its infancy. I believe in 5-10 years, we’ll have a steady stream of foreign capital that we can cycle. Currently, our issuance is 3-year money but the mortgages that we’re financing is up to 3 decades. So once investors gain trust, in about 5 years, especially if we can prove ourselves this time around, we can obtain longer term money.
Locally, the institutional investors including insurance companies will start understanding that their money should be put into something long-term (into companies like us). So local investment should increase. The government program wasn’t meant to last forever. It will die down, because they already invested 3.4 trillion MNT and now they’re circulating it.
46. How do you see Mongolia’s urban setting in 10 years, what’s your vision for Mongolia in that sense?
Development wise? You know all these new residential houses that are coming out, and it’s mostly due to the mining boom. It’s actually a well documented side effect of a commodity boom that the real estate sector gets developed really well. Eventually, I’m hoping that the ger area will not be there, or at least half of it won’t be there. The end solution for air pollution and soil degradation is apartments or facilities that can provide sewage, electricity and heating. Apartments can solve the health, environmental, and social problems plaguing Ulaanbaatar City. I think we can actually reduce it quite a lot in 10 years.
47. How was “8%” (mortgage) set?
Not to be very technical, but there is a science behind it. At the time, the policy rate (or rate determined by the central bank) and loan and savings interest rates were plugged into a formula to yield this number. Which was the cheapest sustainable interest at the time. With 8 percent, the banks and companies don’t lose anything, but they don’t make a hefty margin. I even assume that the Central Bank may be incurring a loss from this transaction due to its social nature.
48. Do you ever see the 8% interest rate going down?
Definitely. The current Central bank is 11%. If that goes under 8, the 8 percent financing will no longer exist. Developed countries are “Talk 3 zeroes after the dot”. Because we’re only developing, Mongolia is talking full percentages.
49. What do you like and hate about your job?
“The thing that I like most about this job is that my job addresses one of the 3 main human necessities: food, shelter, and clothing. This job tries to provide one. What I least like about this job is that I’m doing this in Mongolia, where it is relatively difficult to make progress fast.”
50. What does Amarjargal Foundation do and how involved are you at the foundation?
Initially, it was founded by my father and his colleagues, mostly scholars. Their main purpose was to come up with plans and advice for the Mongolian economy. I joined in 2013 when the foundation was not operational and I ramped it back up. I focused on giving financial advice to people, helping them understand why these financial institutions ask for certain things.
Basically, our foundation gives advice to people on what the financial market does. We gave some advice to these outdated agricultural companies, on how their financials should look like, how their balance sheet should be ordered so they can apply for loans, what’s the correct form of governance, etc. We also give out scholarships when we have money. It’s a non-profit so we don’t charge anybody for these services. It’s mostly contributions from people. People do donate, so we use it for our operations.
51. In your opinion, what is the highlight of your career?
Definitely the USD300 million bond issuance. This money is not small, even globally. So it was a huge achievement for Mongolia, the company and me as well.
PERSONAL
52. Do you have any mentors? How did you pick them as mentors?
“My father Amarjargal Rinchinnyam is my life mentor, because he’s been through so much and he dedicated so much for me. I would ask him if he would be satisfied if he were in my shoes, and living the way that I’m living, because he lived through a socialist era, a depression, and now a democracy. ”
All the strive was meant for us, our generation, even though we are not the generation to fully experience democracy. The question is: Are we taking enough advantage of it?
Developed countries are not the only example to look up to, because they’ve already had their turn and they’ve got their standards. I think our example should be inspired from our elders. They must have had a dream, an idea of what they would do if they were given all this freedom.
53. Are you single or married? What are your thoughts on family planning in Mongolia?
I am married, and I have a 2-year-old boy. It's too early for me to give advice on family planning but my general thought is to have lots of children. Let’s reach 10 million!
54. How do you relax? What’s your hobby or where can we find Anar when you are not working?
It’s a recent hobby, actually. I took up running. Since June, I have ran over 200km. I try to run 3 times a week, especially in the morning. When I am not working you can probably find me with my family.
55. Where do you see yourself in 5-10 years?
If it’s 10 years, and this is like a wish. I want to be able to retire at 40 and focus on my hobbies. There was this meme “What’s the best job in the world? the answer was “no job”!.”
Keeping in mind that doing what you love is not a job, I want to run and draw pictures. I actually don’t tell this to many people, but I want to be an animator, a cartoonist. Maybe if I retire, I will try competing in that sector. Obviously, retiring at 40 is a big dream so I’ll let you guys know if I make it.
56. Who do you admire most in Mongolia? A living person and why?
“We’re living in an age of titans. Because we have a small population, we have access to these great people and their views. You see all these conglomerates and all these people like the CEO of TDBM Orkhon, Chairman of Mandal Daatgal Ganzorig, Chairman of MCS Odjargal, etc., doing mentorship events, giving interviews, and tweeting. ”
This is a hard question. Currently, I can’t say that there is one person. I’m still soaking it all in. These titans are still living.
57. If you could compare yourself to another animal, what animal would you be?
Obviously because I’m in Mongolia - a wolf. I don’t know why. If spirit animal, then something big and clumsy.
58. What’s the best life advice that you’ve received? Who gave this advice?
I don’t want to say who, but the best advice was “Don’t be a pigeon at the monastery” (Гандангийн тагтаа байх хэрэггүй). Loosely translated, it means:
“Don’t be one of those people who think your next meal is going to come to you. The opportunities are not going to be presented to you. Be more proactive towards what you want.”
59. A personal advice you would like to extend to fellow Hobby Alumni?
Keep doing what you are doing, you are probably succeeding. If not, give it a little bit of time, you will succeed. And don’t be a pigeon.
60. A personal advice you would like to extend to fellow Hobby students?
For Hobby students, technology is rapidly changing everything. Take a look into that.
The future is going to be more creativity driven. Definitely don’t stick with one major or one language, learn multiple. Read a book called Sapiens, it makes logical sense.
61. What are your good and bad habits?
I smoke. That’s probably a bad habit. Good one is probably empathy, which has helped me out a lot.
62. Funniest story at work you can share with us?
If it’s personal, one time, I was late for a meeting. I was catching a cab, and when I walked into the cab, I ripped my pants. I took the cab straight back home and changed, which then I was already late to the meeting, I was scolded for that. I couldn’t tell him my pants ripped. Life just happens!
63. Now if you can fix 1 problem in Mongolia, what would it be?
To be current, I would have to say:
“Don’t choose a Presidential System. Multiple heads debating and creating something has a better end product than what a single person can produce.”
64. If you could have dinner with anyone dead or alive who would it be? And why?
Stephen Hawking, mostly because I like astronomy and his thoughts would be out of this world.
65. Who would you recommend to interview next from Hobby Alumni? And Why?
You (Batzul Gerelsaikhan) and/or Batnasan Chinbat (#HobbyAlumni 2004). Batnasan was 2 years ahead of me. Currently, he does motorsports and rides a bike. He might be really interesting for reads after my boring babble.
“Definitely the USD300 million bond issuance was highlight of my career. This money is not small, even globally. So it was a huge achievement for Mongolia, the company and me as well.”