The Asian Development Bank (ADB) has approved a $73mn loan to improve social welfare support for Mongolia's poor and vulnerable, mainly women and children, with the aim of lessening socioeconomic impacts of the COVID-19 pandemic.

The project will specifically expand the child money programme, which provides universal cash grants to all children aged 0–17. The ADB will finance a share of the extended shock-response increase in the monthly child grant benefits through June 2021. This will follow on from earlier top-ups supported under an emergency assistance loan from April to September 2020.

As early as May 2020, nearly three-quarters of all Mongolian households and 85% of poor households reported experiencing some sort of economic shock amid the pandemic. Nearly two-thirds (64%) of all households reported an increase in food prices, while nearly three-quarters (73%) of self-employed workers experienced income loss. About 70% of farmers and herder households reported a decline in income y/y.

The ADB will also support the digitisation of social welfare programs into the “e-welfare” system to streamline benefit and service delivery, and will implement and evaluate a pilot test of the graduation approach to introduce an innovative type of social protection programme that builds on cash transfers with a holistic set of livelihood, financial inclusion, and coaching interventions.

The project forms part of ADB’s holistic and comprehensive package of support to mitigate the impact of COVID-19 in Mongolia. The total project cost is $259.64mn, which includes government financing of $186.64mn. It is expected to be completed in 2023.