This week in the Passport Series, we will give you a look into the Microfinance Industry in Mongolia. For more background, check out last week's Country Profile of Mongolia.
Microfinance in Mongolia has been around since the mid-1990's in various forms. As the country has progressed, its Microfinance Industry has taken many different shapes and explored some very interesting and innovative financing solutions; check out a post written by one of our Fellows on Green Loans, an article on Mobile Banking, and some of the latest news on Microinsurance, all in Mongolia!
Currently, there are 7 MFIs listed on MIXMarket.org ; with 2 self-reporting their financial information. The country boasts total loan portfolios for $553 million with an average loan per borrower of $1,606.60 USD spread between 384,317 active borrowers.
Kiva has 2 partners in Mongolia, Xac Bank and Credit Mongol LLC. Here is a little bit about why we chose both of them and what we love about what they are doing!:
Xac Bank was started in 1998 and is currently the largest MFI in Mongolia with 16,000 clients. The average loan size of a Xac Bank client on Kiva is $1,165 USD. One of the reasons we love Xac Bank is for their savings policy: At the end of this loan, non-delinquent borrowers will be given back 9% of the interest he or she paid, due to the 0% interest capital XacBank received from Kiva. The repaid interest will be placed in a XacBank savings account, giving the borrower an additional financial tool. (Check out the post to our blog last week on the basics of Microsavings!) Xac Bank has been on Kiva since January 2009 and holds a 5-star Risk Rating!
Credit Mongol started partnering with Kiva in April of this year, and was established in April of 2000. They have an average loan size (on Kiva) of $1,400. Credit Mongol's mission is in-part to get access to credit to the most rural locations in Mongolia. (I am sure you can imagine just how rural Mongolia gets!) They also offer several different loan options to their clients.
For some more photos and info on banking in Mongolia, check out one of the Kiva fellows' blog about rural and urban businesses and banking!