Badarbirvaa Batdulam

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)

(Pictured is borrower Dorjsuren Ravdandorj)