Kiva Field Update - News from Mongolia

Dear Cultural Connections,

Thank you for supporting an entrepreneur in Mongolia.

Dear Lender,



As we enter the holiday season, XacBank would like to wish you a Merry
Christmas and a Happy New Year! Here's an e-card we created for you,
featuring XacBank's staff and Kiva borrowers: http://www.youtube.com/watch?v=Zqkvv532mFI



I'm Jane Lim, a Kiva Fellow who served for the last two and a half
months at XacBank, a Kiva Field Partner in Mongolia. My fellowship just
ended, and until a few days ago I was in Mongolia, experiencing the
bitter cold and breathing in the smoke that pervades the city of
Ulaanbaatar due to widespread coal burning by surrounding ger districts.
A ger is a traditional Mongolian tent, round and white, and very much a
part of modern Mongolia. In the middle of each ger is a rustic stove
used to burn fuel to warm the ger and to cook. The past few years have
seen a steep rise in pollution as ger districts and their accompanying
coal burning have rapidly grown due to an increased number of migrants
from the countryside.



In my last few days in Mongolia, it was a common lament by my colleagues
in XacBank's microfinance department that I would be missing their New
Year’s party. New Year’s parties in Mongolia are a huge
celebration—more than just an annual dinner and dance, these are
events for which people get decked out in their finest, more than any
other event in the year. When I visited Oyun Pildulam, a Kiva borrower
who works as a tailor right by XacBank's Chingeltey branch, her wall was
covered with custom-made fancy dresses for the New Year—sequins and
feathers galore with nary a hint of understatement.



Other tailors I've met are not as lucky as Oyun, who has five employees
and gives classes to aspiring tailors. Gantuya Narmandah, another Kiva
borrower I met, struggles to find stalls willing to sell the products
she sews in her home. She lost her job in a sewing factory after the
collapse of socialism in Mongolia in 1990. Many industries were
privatized following the introduction of democracy, and in the process,
many Mongolians lost their state jobs and turned to running their own
microenterprises. Gantuya wasn't the first or last Kiva borrower I met
who cited the impact of the change in political systems. Tsend-Ayush
Lhagva used to work as a truck driver, but after dabbling with different
small businesses, she has settled on making Mongolian boots and is
finding it to be the most profitable thing she has done. In my short
time in Mongolia, I had the good fortune to meet a wide variety of Kiva
borrowers and learned that they can be extremely diverse, yet similar.



Here's a video featuring Gantuya: http://www.youtube.com/watch?v=R_fVmg68PBg



Unlike many other Kiva Field Partners, XacBank is a registered
commercial bank. XAC LLC started in 1998 with funding from the United
Nations Development Programme and was Mongolia's first registered
non-bank financial institution. It later merged with another non-bank
financial institution to form XacBank, and then started commercial
operations. Despite being a commercial bank, XacBank has never wavered
in its social mission; it can be argued that its commercial
profitability has given it the ability to design and implement
initiatives that benefit the poor.



While I was at XacBank, I got to know two of these initiatives at a
deeper level. Both struck me as relevant and practical. The first is the
franchising of savings and credit cooperatives (SCCs). Because Mongolia
is sparsely populated, the cost of reaching borrowers in rural areas is
high. It is not economically viable for XacBank to open an extensive
number of branches throughout Mongolia, so the bank has decided to help
strengthen local SCCs in order to aid the rural community. XacBank
currently supports local SCCs by providing training, expertise and
wholesale loans; it is also planning to provide mobile banking, leasing
and micro-insurance via SCCs. The good thing about franchised SCCs is
that SCC members keep their own profits, which further enrich the local
community.



The other initiative is the introduction of eco-loans. In order to
mitigate the pollution brought about by coal burning in winter, XacBank
has introduced loans for subsidized environmentally friendly products
such as energy efficient stoves and ger blankets. Ger blankets are an
alternative form of insulation that wraps around a ger, keeping it warm
without the need to burn fuel. Eco-loans were introduced this winter and
XacBank hopes they will be popular.



To keep track of XacBank's latest innovations and initiatives, please
join our lending team: www.kiva.org/team/xacbank_mongolia



Having worked at XacBank for the past few months, I have witnessed the
potential the bank has to expand and refine its services to increase
profitability as well as to aid the poor. XacBank values its partnership
with Kiva not just because Kiva lends at a 0% interest rate and accepts
borrower defaults, but also because the organization, like Kiva lenders,
attaches value to the human connection.



To share this enthusiasm with XacBank's Kiva borrowers, we created a
video to illustrate to them in their language how the Kiva process
works. Here is an English version of the same video: http://www.youtube.com/watch?v=wiXu1ICaz_Y



XacBank became a Kiva partner in January 2009 and, with your help, has
since fundraised over US$1 million on Kiva, and has administered loans
to over 1,000 Kiva borrowers. We hope that you will continue your
support of Kiva and XacBank in 2010 and beyond—a little goes a long
way!



Cheers,



Jane Lim (KF9)



http://www.youtube.com/watch?v=Zqkvv532mFI

http://www.youtube.com/watch?v=R_fVmg68PBg

http://www.youtube.com/watch?v=wiXu1ICaz_Y