Non-Performing Loan Recovery: The Case of Mongolia

Journal of Applied Finance and Banking

Davaajargal Luvsannyam, Enkhtur Minjuur, Dulguun Lkhagvadorj, Enkhsuren Bekhbat

G21, G29, G33

Non-performing loans, Recovery rate, Banking sector

In this study, the activities related to the recovery of non-performing loans were considered in case of “Savings Bank” LLC. According to the survey, it takes an average of 4.2 years to recover non-performing loans, and recovery rate is on average 83 percent. The recovery rate of loans has been declining over time despite the fact that it was high in the first years of the receiver's appointment. Furthermore, the amount of non-performing loans recovered out-of-court was relatively small compared to the amount of that recovered through the courts. Although in-court activities to recover the non-performing loans takes 1.3 years more than out-of-court, the recovery rate is 7% higher in terms of judicial proceedings.