A. BACKGROUND

Mongolia has received a credit from the International Development Association (IDA) for a Strengthening Fiscal and Financial Stability (SFFS). The project is designed for four components: (i) Strengthening Macroeconomic and Fiscal management, (2) Improving the efficiency of public financial management, (3) Enhancing financial sector stability, (4) Project management. The objectives are: to contribute to the government of Mongolia’s efforts to strengthen fiscal and financial stability and improve the quality of expenditure management. The project is supporting government efforts of building capacities in the fiscal, social, and financial sectors (for more details on the SFFS, please refer to the project appraisal document  report No.P161048).

Mongolia’s Financial leasing law came into effect on 22 June 2006 and there were minor amendments in this law in 2018. And as stated in the following documents the Government of Mongolia has listed the amendment of the Financial leasing law as one of its objectives.

According to Parliament Resolution №42, dated on August 28th, 2020 ratified the “Government action plan 2020-2024”, states that “3.1.5. Accessibility of financial leasing services will be improved”. In addition to Parliament Resolution №12, dated on January 22nd, 2021 ratifying the “Agenda for improving Mongolia’s legislation 2020-2024”, states that “49. Amendment to Financial leasing law by 2022” with the following objective of improving regulation of the financial leasing sector, implementing international best practices, and improve the ability for financial leasing companies to raise capital.

The financial leasing sector is not regulated by any state entity, and the current law has several contradictory articles that is not in compliance with international best practices, which is hampering the sustainable development of the financial leasing sector as well as can create potential risks to the financial sector.

According to the current legislative environment only banks and savings and credit cooperatives are able to engage in financial leasing activities. However, this activity is not tightly regulated, and special licensing is not required to engage in financial leasing.

Due to the unregulated state of the financial leasing sector data collection, it is completed in an ad hoc approach. However, according to the latest study completed by XacLeasing LLC in 2016, the domestic leasing sector was estimated to be 410.9 billion MNT which is about 60% larger than the 256.0 billion MNT of the savings and credit cooperative sector in 2020.

Therefore, amendments are needed to the Financial leasing law to improve the state’s responsibility to the financial leasing sector, implement international best practices, as well as remove contradictory articles and refine the rights and responsibilities of parties engaged in financial leasing transactions.

B. OBJECTIVE OF THE ASSIGNMENT 

The objective of the National Individual Consultant is to draft amendments for “Financial leasing law” and provide recommendation for its related legal environment. 

C. SCOPE OF THE WORK 

The following assignments will be conducted by the National Consultant, but not limited to:

I. Review and develop amendments to the Law on Financial leasing:

1. Carry out analytical review of the existing Financial leasing law, regulations, rules and identifying parts that are obsolete and parts that need to be improved.
2. Conduct a comparative research on Financial leasing law which considers international best practices and reflect those in the law draft and regulations.
3. Prepare necessity study on amending Financial leasing law
4. Prepare concept on amending the Financial leasing law
5. Produce the draft of the Financial leasing law amendments and relevant regulations.
6. Prepare report on economic impact analysis on the draft of financial leasing law.
7. Organize public discussion on the draft of Financial leasing law
8. Summarize comments from public discussion and reflect them in the draft document

II. Recommendations on Institutional arrangements for FMID:

1. Prepare and organize a public forum to review and improve legal framework of Financial leasing law.
2. Conduct trainings for the staff at the Ministry regarding to new amendments.
3. Undertake such other tasks as reasonably requested and/or assigned by the Head of FMID, FPD, MOF.

D. DELIVERABLES

Based on the contracted assignments and detailed contract implementation plan approved by the client, the National Individual Consultant’s deliverables will include:

1. A report on the review of existing Financial leasing law and regulations with the comparative research of international practices on financial leasing;
2. Necessity study on the amendment of financial leasing law;
3. Concept paper on amending financial leasing law;
4. Providing a draft document of the amendment on Financial leasing law and related regulations and rules;
5. Report on public discussion results and comments;
6. Economic impact analysis on the amendment on Financial leasing law; and
7. Providing a final report that incorporates all deliverables and supporting documents.

E. CONSULTANT’S QUALIFICATIONS/ SELECTION CRITERIA

Education: A suitable candidate should have a bachelor’s degree or higher from an accredited university in the fields of Finance, Economics, Law and Public Policy.

Experience: Incumbent should have at least 5 years of relevant professional experience in the Public sector with the skill of developing legislation, conducting financial and economic analysis; and a good understanding of Mongolian financial systems, laws, and regulations.

Language skills: Academic/Fluent written and spoken skills in English and Mongolian.

Other skills:

• With excellent skills and abilities to function effectively and collaboratively in a team environment.
• Be proficient in PC based applications such as Microsoft Word, Excel and other related software and data management, and have excellent web research and navigation skills.

F. SUPERVISION AND REPORTING 

Consultant will report directly to the Head of FMID, FPD of MOF. The senior specialist on financial market tasks in collaboration with the Head of FMID will provide input to the evaluation of the consultant’s performance.

G. CONTRACT DURATION 

The consultant is expected to commence working effective from August 2021. The duration of the assignment is 6 months.

H. INSTITUTIONAL ARRANGEMENTS 

The relevant counter specialist of FMID shall provide necessary data and information to the consultant for performing the assignment. The MOF will provide office space with furniture, internet access, computer and printers.

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