Here at VisionFund, we often speak of the importance of reaching rural markets. In this blog, Tumurchuluun Ikhagvasuren, VisionFund Mongolia’s regional manager for rural areas, talks about how he joined the organisation, and why rural financial inclusion in Mongolia is so important.
Before joining VisionFund Mongolia more than ten years ago, I worked as a loan officer in a bank. In this role, I met many people who couldn’t meet the bank’s requirements, and were excluded from financial services. I wanted to help, and so when I heard about VisionFund Mongolia opening a new branch in the Darkhan Province where I live, I decided to join them.
I clearly remember Oyuntsetseg, one of my first rurally based clients, who was a member of a solidarity group called ‘Collective Power’ and a mother of six children. She was a sweets retailer, and first started her business with a loan of only 50,000 tugrik ($25). Since then, she has had 8 loans, with the most recent loan of 5 million tugrik ($2,500) a significant investment in her entrepreneurship. As her capital increased, Oyuntsetseg diversified her business, selling noodles, ice cream, coal and firewood. She now owns land with a house for her family, a truck for goods distribution, and most importantly she has been able to send four of her children to university so far. People like Oyuntsetseg give me the motivation and courage to help more people in need.
It is very important for low-income households to access basic financial services in order to have ownership and stable resources to provide protection from potential risks and to provide for families. However, for people living in rural Mongolia, the access to these services is limited. Most institutions require collateral or income statements to provide loans, and in once loans are granted, interest rates can be high. Adding to this, businesses entrepreneurs in rural areas tend operate at a micro level, running small eateries, kiosks, shops or raising a small amount of livestock and growing vegetables on a patch of land which makes them more vulnerable and prone to crisis from shocks such as weather, unexpected events and market changes.
In a country where nearly a third of the population lives in rural areas, we need to focus on serving these clients. It is very important for our rural branches to contribute to developing communities through economic empowerment.
In partnership with the Area Development Programs of World Vision Mongolia, we are reaching and supporting micro entrepreneurs at various levels of development. We plan to open four new branches in rural areas in the near future, extending our services to even more people in need. People like Oyuntsetseg, who just need a hand up to change the lives of their families.
Tumurchuluun started with VisionFund Mongolia as a Loan Officer, before working his way up to Regional Manager. Today, he is in charge of rural areas across five provinces in Mongolia, covering 3,687 clients and impacting more than 5,300 children annually.