Choijilsuren N. is 38 years old and lives with her husband and 3-year-old child in Arkhangai province in central Mongolia. She and her family live in a ger, a traditional Mongolian housing tent. Her husband is self-employed and works as carpenter in their town. Their only child will soon start kindergarten.
N. operates a hair and beauty salon in her town along with several of her friends who are beauticians and hairdressers. They share the rent of the room in which they operate their business. N. started the salon in 1998 with a working capital of 200,000 tugrugs (~140 USD). The business has grown steadily over the years and is now a popular salon in the area. Today, her working capital exceeds 500,000 tugrugs (~350 USD). While her cooperation with her friends has proven to be successful, N. dreams of being on her own. She says, "I would like to open my own beauty and hair salon in the future." She is requesting a 700,000 tugrug (~490 USD) loan to purchase beauty products for her business.
XacBank was founded in 2001, and listed its first loan on Kiva in January 2009. It is the largest microfinance organization in Mongolia, but also has mainstream commercial operations. XacBank has the vision, scale and innovation to develop and implement new solutions to poverty. It is currently utilizing Kiva’s 0% lending interest rate to return 9% of interest paid from borrowers to them in the form of a savings account at the end of their loans. This not only allows borrowers to gain financially, but also encourages them to save.
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This loan is being administered through XacBank, a Mongolian for-profit microfinance institution. XacBank is located in every province of Mongolia, reaching some of the most rural micro business clients. With this Kiva loan, there is an opportunity for the entrepreneur to get a savings account including 9% of the interest if they pay back the loan on time. This is a special savings account that XacBank has specifically prepared for the Kiva loan borrowers to promote savings habits.