The ger district

A couple of days late with this post...busy, busy, busy J

Member service at Altandaalgaa SCC

We have started work with our second savings and credit cooperative. Considered a medium sized credit union in Mongolia they have 350 members and have 1,406,632,425 MNT in total assets (roughly $1,082,025 in Canadian dollars). Established in 2002 they have just celebrated their 10th anniversary. They made is through the bad times in 2005 which saw a significant
number of credit unions in Mongolia declare bankruptcy, and it is soon clear why. We are peppered with questions about inflation, governance, membership engagement and board engagement by lunch both Trudy and I are looking rather frazzled and our poor interpreter is taking off her glasses and rubbing her eyes wearily.

When we start to talk about strategic plans the executive director pipes up. She would like to expand into the ger (pronounced gar) district. The ger district starts only 4 blocks from where we sit. On one side of the road are multi story apartment buildings on the other is a laborite of makeshift single family homes. Spread out for miles, traditionally this was where transient Mongolians would set up their ger when they came to UB. In 2002 the Mongolian government started to grant property ownership rights to all of its citizens, prior to this all land was owned by the government. Apartments were deeded to the occupant at the time and all other people were allocated a small amount of land depending on where they claimed it.



Ger district

For this reason almost all of the land in the ger
district is actually owned by the occupants. Most of the gers have been removed and replaced by make shift homes. Wooden shacks and small square brick homes each with a fence are butted up against each other in no particular order. Gravel roads snake in all directions and sign posts are nonexistent. Poverty and alcoholism are rampant in this area.

For a myriad of reasons there has been a migration to UB over the last several years, first there was the move to a market economy which caused wages to plummet and unemployment to sky rocket, then in 2010 a dzud struck (a really bad winter that killed millions of animals and left thousand of rural families struggling to survive). Traditionally Mongolians are nomadic, so they move, when the seasons change, when times are tough, when the grass grows greener, they pack up their gers and hit the road. One argument is that problems arise when they quit moving.  Many arrive in UB with the expectation that they will be able to obtain work.  While the unemployment numbers for Mongolia are definitely trending downwards there is still a significant % of the population that is not able to find work.  Add to this the vodka legacy left over from the Soviet Union and you have issues.  

 

It is against this backdrop that we visit the Tsolmon-Ireedui Foundation (like them on facebook for more inof at - Tsolmon-Ireedui Foundation).  A member of the credit union Chimgee Tsolmon has taken out a loan to expand her home to accommodate a daycare/orphanage.  Unable to obtain financing at the banks she is passionate about her cause.  Her goals are simple, to provide a safe and affordable (free if required) place for parents (often single) to leave their children so that they are able to find productive work that can improve the quality of live for their families. When we ask Chimgee what her dream is she tells us that it is really quite simple.  She believes that if these children are provided with adequate food and water and a safe environment they will then be able to study instead of worrying about how to survive.  Provided with the opportunity to study she believes that the children will then have a chance to succeed, to go onto university.

As we leave the orphanage I am struck again with the similarity between Canada and Mongolia,.  Unfortunately we have the same issues at home.  I could very well be standing “on reserve”.   This makes me ask myself, if these credit unions who are struggling to survive with so much less than we have, are working towards improving conditions for those who need it most...what are we doing, or perhaps more to the point why are we not doing more?

Terelg National Park

Due to the change in our schedule that has us remaining in UB for both weeks our SCC has agreed to "keep the Canadian entertained" and is taking us on a day of "cultural activities". In true Mongolia style upon learning that two of our team mates are also at loose ends on Saturday arrangements have been made for all of us to go to the Terelg National Park together.

To facilitate this our next SCC has been called and will provide a vehicle and driver. I don't know if I have ever met a more hospitable people than the Mongolians. Terelg Park is located roughly 50km out of UB. Today's post is the day in photos. Sufficient to say that it was incredible. The scenery is amazing and the people are wonderful, we are very lucky to be able to be a part of this grand adventure.

Incredible rock formations

satellite dish and all...

Moving of a Ger

Wow what a great day!

Inside of Ger at tourist camp

Tourist Camp

Tuul River

Prayer Circle

The Mongolians take their Karaoke very seriously

Yakiddy Yak don't talk back

Check out the wooden saddle

Ger

 

Our Work

We delivered our report today.  We have reviewed the financial (Ken you will be interested to know that financial the world around are prepared the same way – we were able to decipher most of them without the assistance of our translator).  We have talked to the Chair of the Board, the CEO, and the accountant in detail.  Working with a translator adds an interesting twist to everything.  Each question has to be well thought out, but even so sometimes the answers don’t relate to the question at all and you are sure something has gone astray but what…one quick question that we asked took us in to a 2 hour discussion around share concentration…we thought we were talking about conflict of interest.  These questions are the best.  It from here that most of our aha moments have come.

We are pleased with our findings, we have been able to identify several areas that the credit union will want to be aware of going forward, and hopefully this information will be of value to them in the future.  We have also learnt so much. 

Luckily we worked on our report late last night, the plan was to have time today to do it at work but we ended up spending the day doing member visits (much more inspiring) and only arrived back in the branch 15 min before the board was due.  No worries we would present a high level overview, we were good to go. 

I may have mentioned once or twice that traffic in UB is insane, several of the board members were caught in traffic so we waited… the room was sweltering, sweat was running in rivulets down my back, the room was silent, everyone sitting smiling at each other, small talk an impossibility with only one translator in a room of 8 people, and then inspiration struck.  One of the key areas that we had been working with the credit union on was member engagement.  Before leaving home I had downloaded several pictures of Integris Credit Union staff in the community.  I booted up my computer, hooked up the projector and put on an impromptu slide show.

The first slide to appear was a picture of us in the Canada Day Parade. We had made a float that featured the International Year of Cooperative.  After explaining what a mascot was and why we had chosen a squirrel (they save for hard times) we were off.  Pictures of “Stasher” in the parade, at the dog sled races and downhill skiing were followed by pictures of the branch which had also been decorated for IYC.  The ice was broken, questions came fast and furious, how did we participate in our community, what value did this add, what could they do? 

The rest of the board arrived and we presented our report.  We talked to the risks around high share and loan concentrations, we reviewed policies and procedures and recommended that several new policies be developed, we touched on financial and provided advice on a couple of complex HR issues.                                                     

But when all was said and done and the Chair of the board was thanking us, she shared that what had been the most valuable for her was been able to talk to someone, to share her ideas and concerns, her dreams and her fears.  To learn that there are so many others out there just like her, asking the same questions, looking for the same answers.  

She said that she felt “inspired”, she had identified 3 key areas that we had addressed as her priorities and would be implanting plans to deal with these issues.  But she also said that she had learnt from us the even though they do “serious work” it is okay to have fun, that laughter in the work place is a good thing, and that it is important to take the time to find out what is important to your members and then to work together with them to try and help them achieve their dreams. It is important to remember that you are a co-operative, owned by the members for the benefit of the members.

Turning poverty into prosperity

Turning poverty into prosperity.

Sain uu (Hello) I would like to share a couple of stories today of how credit unions in Mongolia are helping to turn poverty into prosperity through co-operative action.   First some background…

Mongolia only started to develop a market economy in 1990-1991 after it pulled away from the USSR.  It has been a slow and complicated process, made significantly harder by the global recessions which saw a significant drop in copper prices.  Unemployment is trending downwards but is still in the double digits, inflation is shooting up it is now over 11% and expected to increase.  This has put significant pressure on interest rates which are also very high.  When rates are quoted here they are quoted on a monthly basis, not annually. For more info on Mongolia try this site http://www.worldbank.org/en/country/mongolia

As you can see the need is great, fortunately the solution is also great.  Credit unions are helping to create jobs and opportunities, whether it’s providing loans to start a business or helping member to save for the future, credit unions in Mongolia are making a difference.  

First I would like to introduce you Sambuuyam. We went to see Sambuuyam at his office, it is set above two of his businesses an unexpected combination of a karaoke club and a car wash.  Sambuuyam also owns a construction company, an agricultural company, and plans are under way to add a manufacturing arm to the construction company, he is also hoping to add two stories to his existing building, providing a restaurant and apartments.    My first question is why such a diverse set of companies, his answer reflects the reality that is Mongolia.  As the market economy expands and the city grows there are opportunities for small business to fill the gaps in the economy…but Sambuuyam hasn’t always been a businessman.  In order to take the first step into the new market economy he had to get a loan, and that is where the CU came in.  Now Sambuuyam  employs 40 – 60 employees who support over 200 family members.  He pays them very good wages and is developing “social programs” to assist his employees if they get sick or need help in other ways.

The second person I would like you to meet is Tungalay.  Tungalay rents a stall in the market to sell beauty supplies.  The credit union lent her the money to get started at “a fair rate” she wasn’t able to qualify with the banks, Tungalay like so many others falls into the “unbankable” category.  If you don’t have collateral you can’t borrow money, which means that you have to work for minimum wages…which in Mongolia is legally set at 130 USD a month, and there just isn’t enough to save and build your net worth, so that you can become bankable…it’s a vicious circle.  We ask  Tungalay what difference the CU has made in her life, she tells us that now she can afford the son’s school fees and she is looking forward to expanding her business, soon she may be able to hire an employee, her life she tells us is much better now.

Nine petals a flower makes

We have started working with our first credit union.  Eson delbee translates into 9 petals.  When we ask where the name came from we are advised that the CU was started 10 years ago by 9 founding members.  They felt that their CU would grow like a flower and bloom in the face of adversary.  And grow it has.

 I’m surprised when we arrive at the CU on the first day, located on the 6^th floor of a very nice office complex, we step out of the elevator and other than the fact that I can’t understand a word anyone is saying I could be in Canada, each desk has a computer, there are product information sheets displayed in a rack in the centre of the room, and the staff all of whom who appear very professional are working industrially at their desks.  The morning is a flurry of meetings and then it’s into the car and off to the country.

The reason for this impromptu visit is to show us the roots of the credit union.  It turns out that Eson delbee started in a district of UB called Baganuur.  Baganuur is home to the largest open pit mine in Mongolia and it is here that the roots of Eson delbee are to be found.  The trip is “not far, not far” only an hour…”not far”…I find that I am becoming obsessed with the roads and traffic in Ulaanbaatar, but that is for another blog, sufficient for today to say that it takes over 2 hours to reach Baganuur and 3.5 to get back, both Trudy and I arrive pale faced and breathing deeply.  I am reminded of my childhood days of riding the Ferris wheel with my best friend chanting “in your nose out your mouth, in your nose out your mouth” the entire time with hopes to avoid the inevitable.  The issue isn’t that the road it’s self is windy but that in an effort to avoid as many potholes as possible the drivers weave in and out of the lanes with complete and utter disregard for the tummy’s of their wimpy passengers. 

As we drive through the country a shape looms on the horizon, at first it is hard to recognize but soon the massive statue of Genghis Khan rises out of the grass.  Measuring 131’ tall he is hard to miss.  Our translator tells us that there are plans in place to construct 10,000 solders that will guard the grounds around Genghis Khan soon.  Mongolians can pay 1,000,000 tugriks (about $700 Canadian) to have their faces used as a template for one of the faces of the solders.   

 

 

I am pleasantly surprised with Baganuur.  Much cleaner than Ulaanbaatar it has the feel of a small community although in reality it is quite large coming in as Mongolia’s 10^th largest city.  We visit the home of the credit union.  Located on the bottom floor of an apartment building the one room office is very small.  This location will now be a branch of the CU with the head office being located in UB.  It has quickly become apparent that the staff at the credit union are very astute. 

Faced with a system that doesn’t yet support the credit union structure (no central, no way to manage liquidly) they have recognized an opportunity to balance their needs in house.  The branch is Baganuur has a reasonably high amount of deposits (all Mongolian credit unions struggle to attract deposits due to the fact that this is no deposit insurance available for credit unions), where as the members in Ulaanbaatar are net borrowers.  By opening a branch is UB they will be able to lend out the funds that they have accumulated in Baganuur. 

As I wind up the day I wonder about the value we bring, clearly these guys know their stuff.  Trudy tells me to trust the process, time will tell she says, soon you will see.

Ulaanbaatar a City of Contrasts

Arrived in Mongolia after 32 hours of travel (yawn) sometime around midnight last night.  Arose this morning feeling surprisingly good and excited to face that day.  Our hosts graciously allowed us a bit of a lay a bed and we don’t start the formal agenda until 10am…time for a shower!

The morning starts with a formal opening meeting.  At the table is our host organization MCTIC – The Mongolian Co-operative Training and Information Centre, MOCCU – The Mongolian Confederation of Credit Unions, and from the government B. Purev of the Savings and Credit Union Department of FRC.

Mr. Purev starts by reviewing the history of CU in Mongolia and the current legislation that the CU system is governed by.  I am surprised to learn that it was only in 2011 that the first separate independent act for CU was passed.  I wonder what impact is this having on the Credit Union system today.  In contrast to the banks in Mongolia, CU in Mongolia are not allowed to advertise, they don’t have access to a Central or Apex and there is no deposit guarantee system.  How do they compete?

After the formal presentations we are handed out our work and travel schedules.  I am disappointed to discover that Trudy and I will not be traveling out of Ulaanbaatar as originally planned.  It turns out that the sacu, as credit unions are called here, has recently moved from the outlying district into Ulaanbaatar.  This means that both of our credit unions are in the city so we will remain at the hotel for the duration of our visit.   Tomorrow half of the crew heads out to rural postings so the rest of the day is given over to a quick tour of Ulaanbaatar.

My first impression of Ulaanbaatar is a city of contrasts.  Our hotel is quite grand in appearance, to the left is a partially completed new construction…it isn’t clear if construction is continuing on this project or if it waits for fates unknown.    Not far away a ger (not a yert) is nestled between two high rises. 

We venture out onto the roads and I know why CCA has forbidden us to drive.  Its absolutely nuts out there.  The reasons are many, UB is home to almost half the population of Mongolia, and more arrive daily.  Add to that the Mongol Rally a 10,000km road race from London to UB…why you ask is that a factor, while after the race all the vehicles are just left behind, so there has been a massive increase in the number of vehicles on the road.  So much so that they have road restrictions here much like we have watering restrictions at home.  If your license plate ends in xxx then you aren’t allowed on the roads on Mondays etc.  It’s crazy.   But back to contrasts while the roads are abysmal (see the picture of the guy who literally lost his wheel in a pot hole) I didn’t see a single accident.  And that is saying something.  At one point in the day, we found ourselves headed the wrong way in a traffic jam, the solution, 9 people jumping into 3 lanes of traffic and then crossing another 3 lanes to get to the other side of the road, and there wasn’t so much as a single horn honked.

Zaisan Memorial View Point

 



CC who?

CCA = The Canadian Co-operative Association

It is thanks to the Canadian Co-operative Association International Development Program that I have this wonderful opportunity.  The CCA has been working internationally (and yes if you are wondering this does include Canada) to establish and grow co-operatives, credit unions and community based organizations to reduce poverty, build sustainable livelihoods and improve civil society.

Credit Unions and co-ops are creating jobs and opportunities, loans to start a business, savings for the future, insurance against catastrophe, children in school, better health, the list goes on.  Our goal as coaches is to help local credit unions to work towards “the common good” as it is referred to in Mongolia, so that members can move out of poverty…for good.  It is part of a larger effort by CCA to turn poverty into prosperity.  A daunting task!

We start our assignment with a three day briefing in Ottawa.  Note books are handed out and we are strongly advised to keep a journal…good advice as it turns out, so much is happening that I am constantly finding myself returning the pages of my journal to sort out the days.  The first sentence in my journal is “Co-ops are often referred to as “the best kept secret, we need to blow this thinking out of the water”.  I couldn’t agree more, but how do we do that?  As corporate social responsibility (CSR) becomes the ‘in thing’, and we all know that it is, then how do we differentiate ourselves from this mass entrance of larger companies into traditional credit union territory. 

CSR is an interesting conversation for credit unions; after all it is our foundation, governed as we are by the 7 co-operative principles.  How do we truly maintain our integrity as we grow?  How do we change with the times, without diluting the model so much that it becomes ineffective, or worse loses its core principles? 

I believe that we need to capture the pioneer spirit we started with.  Mongolia I hope will help me do that.  We live in a time were people are questioning the status quo.  My role in Mongolia is to help to develop trust in the Credit Union system by creating relationships and sharing knowledge.  It has been my experience in life that the sharing of knowledge is always a two way street.  I’m looking forward to learning all that I can.   

 Left to Right, Joan Burdeniuk, Charlie Collura,Neil Cooper,
Chris Galloway, Graham Mickleborough, Heather O'Hare, Trudy Rasmuson,
and Sue Klassen

Our picture is taken as we get ready to leave, already friends we jockey for position around the 2012 International Year of Co-Operatives banner.  Interestingly enough it was the Mongolian Co-operative movement that put forward the motion to the UN to declare 2012 the International Year of Co-Operatives.  It seems fitting that this is the country that we will now travel to.