Mongolia’s parliamentary committee held a hearing to assess the implementation of the Law on Herders and oversee related institutions. The Central Bank of Mongolia reported that average interest rates on herder loans currently stand at 22.2%, significantly higher than consumer (4.4%) and business loans (5.9%). Deputy Governor G. Enkhtaiwan explained that high rates are linked to the costs of maintaining physical bank branches in rural areas and the inherent risks associated with livestock farming due to harsh weather conditions. Increasing livestock insurance coverage, currently at 18-22%, is seen as a key solution. If herders fully insure their animals, banks could offer lower interest rates, potentially reducing them by 2-3%. Adjusting the threshold for regional livestock loss in index-based insurance could also lower rates, with full insurance coverage (70-80%) potentially reducing rates by 3-4%.