During their recent mission to Mongolia between 24 February and 1 March, RPA Lorraine and our new Gender Adviser in Beijing, Lanyan, visited the Mongolian Women’s Federation. Lorraine particularly wanted to learn about a project that UNIFEM had implemented with the Federation between 1992 and 1995. Lorraine had had little direct contact with the project, which was concluding just as she joined UNIFEM. However, she did remember meeting some of the business women supported by the project at the NGO Forum for the Fourth World Conference on Women in 1995. In fact, she still has a warm mohair stole and a small silver chain purchased from them and was keen to discover what had happened to the project.

In a meeting with the President Ms Gerelsuren and her staff in the Federation office, Lorraine and Lanyan learned that the UNIFEM project was the first in Mongolia to provide loan funds to women and the first to work with NGOs. It coincided with the period when the Mongolian Women’s Federation was transformed from its status as a mass organization under the centrally planned economy to become an NGO under a transitional government. This change meant that staff were no longer civil servants and the Federation lost its direct access to government funding. The Federation feels that the UNIFEM project was especially timely because it provided the Federation with an alternative source of funds and the capacity to generate its own earnings.

Ms Gerelsuren explained that the project had been implemented in three stages:

1. Training women in small credit, business skills and gender. One trainer was trained in Manila and then trained others in Mongolia.
2. A small loan programme was established with funding of USD 30,000 or T10 million in local currency. T2.5 million was allocated to Takhan and T7.5 million to Ulaanbaatar. The funds were administered through the Mongolian Cooperative Bank but the Mongolian Women’s Federation identified the beneficiaries. At the 1994 Tripartite review (between UNIFEM, the Federation and the government), the Federation was able to report that 600 women had received loans of between T50,000 and T300,000 which had generated a total of 250 jobs for women. The repayment rate for the loans was 96 per cent. The Federation charged an 8 per cent rate of interest, compared with the bank rate of 10-12 per cent.
3. In stage 3, the beneficiaries were given business training by an international consultant and a manual was developed to provide guidelines on cooperative development.

As an example of a project success story, Ms Gerelsuren cited the case of one woman who had taken a loan of T60,000 to set up a meat processing business. Following her successful repayment of that loan, she was then able to obtain a loan of T1,000,000 to establish a sausage factory. With the success of this venture (“Hatan Suih”), she has become one of the largest business women in the country.

Ms Gerelsuren regarded the project as very successful, demonstrating for the first time in Mongolia the potential for cooperation between women and cooperatives. Unfortunately, in 1996 the Mongolian Cooperative Bank was made bankrupt and the entire UNIFEM loan fund (which by then had been transferred to the Federation as project activities had ended officially in 1995) was lost. Despite the legal efforts of the Federation, not a cent could be recovered.

Ms Gerelsuren found a bright side even to this negative experience. The bankruptcy of the bank made the Federation realize that they could work independently of the banking system. The technical materials and skills generated by the UNIFEM project were used to organize savings and credit cooperatives across the country. Each cooperative has 24 women members who pool their savings and borrow in rotation from their pooled funds. The Federation also helps the cooperatives to access international NGO and donor funds. In return, it receives a 20 per cent share of the interest paid by borrowers to support its activities. Of the remainder, 60 per cent is used to increase the amount of potential loan funds and 20 per cent is used for training etc.

The Federation now has branches of its loan programme in 21 Imags (the unit of local government). In 1998, the cooperatives provided 5000 women with loans and created 500 job places for women. In addition, 10,000 women and men (mainly women) were trained in business skills. Another 3-5,000 women were also trained in family planning.

Ms Gerelsuren felt that the UNIFEM project had enabled the Federation to support its activities from both the cooperatives and the operation of the micro lending programme. Due to the experience gained in the UNIFEM project, the Federation’s expertise in micro credit and small enterprise development gained recognition among donors. As a result, UNDP now entrusts the implementation of its microstart project to the Federation. The amounts involved are T9 million and T7 million, and the Federation has achieved a 100 per cent repayment rate.

The Federation not only covers its operating costs from the interest charged on its loan programme but is also able to support other activities: for example, 20 per cent of the operating funds for local women’s organizations affiliated to the Federation comes from this source. Approximately half of all Federation earnings come from its micro credit activities. In addition, it earns income from its radio station and from project implementation for other agencies (such as UNDP), while its magazine and newspaper are self sustaining.

It was very encouraging to hear how valuable the Federation thought that the UNIFEM project had been. Ms Gerelsuren maintained that without the project, the Federation probably could not have survived its transition from mass organization to NGO.

One sign of the esteem in which the project is held is the fate of the equipment provided under the project. Ms Gerelsuren (at the left in the photo) proudly pointed to the UNIFEM project photocopier still sitting in her office and being used on a daily basis. She then took us into the inner office to show us the now rather ancient UNIFEM computer (I think it was probably a 286) that had enabled the Federation to develop a client database that is still being used today. Although they now use a more modern computer provided by another donor, such is their sentimental attachment that they cannot bear to discard the old UNIFEM machine. It still occupies pride of place in the office! Ms Uranchimeg (centre in the photo), who now works for UNICEF but had been the UNIFEM Project Manager with the Federation, pointed to a dent on the front of the UNIFEM computer which she said she had made when she fell against it. She pointed to it with pride, as if it represented the scars of a hard fought battle.

Our visit ended with some photos of the office staff and of the ancient but greatly respected UNIFEM equipment.

Dated: 9May1999