The Monetary Policy Committee of the Bank of Mongolia has decided to allow the restructuring of consumer loans held by individuals experiencing financial difficulties.

Under the new arrangement, consumer loans subject to the debt-to-income (DTI) ratio limit may be restructured without additional lending, with their repayment periods extended by up to 48 months. Such restructuring will be exempt from the DTI ratio limit. The measure is expected to ease monthly repayment burdens for borrowers facing difficulties and help them resume regular loan repayments.

As of September 2026, the total assets of the banking sector had reached MNT 94.7 trillion, approximately half of which was allocated as loans. Outstanding consumer loans totaled MNT 13.7 trillion, of which MNT 8.5 trillion was subject to the 45% debt-to-income ratio limit. The remaining MNT 5.2 trillion comprised pension loans and loans secured by savings.

Of the MNT 8.5 trillion in loans subject to the DTI limit, MNT 6.3 trillion consisted of salary-backed loans, MNT 1.3 trillion of herder loans, and the remaining MNT 900 billion of other consumer loans. Accordingly, the new arrangement will apply to consumer loans subject to the DTI limit, including salary, herder, and car loans.

Narantsogt Sanjaa, Governor of the Bank of Mongolia, said, “Individuals experiencing financial difficulties can now extend their loan repayment periods by up to 48 months and reduce their monthly payments. Due to rising prices and other factors, the real incomes of many households have declined, while the number of people struggling to repay salary and herder loans has increased.

“For instance, the non-performing loan ratio among consumer loans subject to the debt-to-income limit reached 9.1% in September 2026, an increase of 2.7 percentage points from the same period last year. This has further intensified financial pressure on some borrowers who have taken out loans from multiple banks and financial institutions.

“Until now, banks had been unable to extend repayment periods through restructuring agreements with such customers. This was because the same debt-to-income and loan maturity restrictions applied to both new lending and loan restructuring.

“After reviewing this situation, the Monetary Policy Committee decided to allow consumer loans subject to the DTI limit, including salary, herder and car loans, to be restructured without additional lending, with repayment periods extended by up to 48 months. In other words, the DTI restriction will not apply to loans undergoing such restructuring.

“However, borrowers should be aware that extending the repayment period will increase the total amount of interest they pay. This measure is specifically intended for people experiencing genuine difficulties in repaying their loans.

“Restructuring will not be automatic. Borrowers must submit an application to the bank from which they obtained their loan. The bank will assess their financial situation in accordance with its internal procedures and decide whether to approve the restructuring. Where necessary, restructuring may be carried out more than once, provided that the total extension does not exceed 48 months.

“Banks will not change interest rates or issue additional loans as part of the restructuring. Rather, they will adjust the repayment schedule of existing loans to better match borrowers’ incomes. I would also like to emphasize that the 45% debt-to-income limit will remain in force for all newly issued loans,” he said.

The decision was formalized on November 3 and officially took effect commercially on November 4.

According to the Bank of Mongolia, as of September 2026, approximately 1.2 million borrowers had outstanding consumer loans. Of these, 66.4% had a debt-to-income ratio exceeding 45%, indicating that a significant proportion of borrowers have taken on debt that is high relative to their income.

Meanwhile, the Monetary Policy Committee reported that the financial cycle had approached its equilibrium level, while credit growth had slowed and cyclical risks had declined. Although prudential indicators in the banking sector remain within the requirements set by the Bank of Mongolia, risks associated with household debt burdens and the quality of consumer loans persist.

Published Date:2026-11-04