of national grants
from the Global
Fund to Fight
AIDS, Tuberculosis
and Malaria.
Creating Resilient
Economies in Mongolia
A pioneering UNDP microfinance programme, initiated in the early days
of Mongolia's shift towards democracy,
has transformed the lives of thousands
of Mongolians by creating economic opportunities, and helping to insulate
them from uncertainties in a competitive
market economy.
During the 1990s, Mongolia began its transformation from a centrally planned economy under the Soviet Union to a market-driven one. Market liberalization, currency reform, financial-sector restructuring and administrative decentralization opened up new possibilities for small and medium-sized industries.
While the country's economic growth accelerated impressively, not everyone benefited from the robust changes. Those living below the poverty line and families outside the city centres often got left behind.
To extend some of the benefits of the new economic liberalization to less-advantaged communities, the Government embarked on an experimental pilot programme in microfinance with the support of UNDP and its global MicroStart programme.
In partnership with the Government and several NGOs, UNDP provided an initial grant of $1 million to pave the way for the country's early microfinance programme. MicroStart officially registered in 1999 in Mongolia and over the next several years the regulatory framework for microcredit in the country took shape. Subsequently, the Asian Development Bank, Mercy Corporation and other donor agencies became involved.
By 2001, the initiative had evolved into XacBank, an independent commercial bank operating on a market basis. From the start, microfinance, including financial services like credit, insurance, transfers and — most importantly — savings, were targeted towards low-income people. Access to credit services expanded across Mongolia's rural areas, and continues to do so today with the use of mobile banking services.
Today, XacBank is a self-sustaining and profitable enterprise with nearly 85,000 loans. Its collaboration with UNDP evolved and remained concentrated on helping the poor. From 2006 to 2008, XacBank became a partner financial institution in providing loans at a special rate to UNDP-assisted small entrepreneurs. In 2010, XacBank developed a separate eco-products programme, which offers low-interest loans for energy-related products for low-income clients. These new programmes illustrate the dynamism of the bank, and its ability and willingness to develop new areas in line with client and national needs.
Tsetsegdelger Byamba and her husband Hatanbaatar were among those who lost everything following the dissolution of the Soviet Union in 1991. Unemployment, a daughter's illness and a fire in their home destroyed life as they knew it.
Tsetsegdelger approached XacBank in 2004 and received her first loan of 250,000 togrogs, roughly $200, to expand her recycling business. Over the next few years, she received additional small loans to build a greenhouse and buy chickens and roosters. "My life from 2000 to 2009 is the story of not giving up," she says.
Her recycling business grew and now produces reusable cotton bags. Her chicken and vegetable farm is thriving. She even formed her own self-help loan group for women who can access loans from XacBank for their own small businesses. (Photo: Puntsag Densmaa/UNDP)
UNDP assisted the Government
of Jamaica in debt-conversion
negotiations in 2010.
Photo Essay | select image number to navigate • hover over slideshow to pause it
1
UNDP supported the development of Ethiopia's first commodities exchange, located in Addis Ababa. The Ethiopian Commody Exchange (ECX) is an innovative collaboration of public and private entities that has modernized agricultural marketing by connecting farmers, traders, buyers and exporters to a onestop exchange market where they meet face-to-face.
Photo: UNDP Ethiopia
2
Traders offer bids at the floor of the Ethiopian Commodity Exchange in May 2011. Hamid Hussien (right), 38, set up his own trading company when he heard about the Exchange's establishment. His company, Hamid Trading, trades in coffee, sesame, beans and maize. His business has grown from 50 clients in 2009 to 190 in 2011.
The Exchange is a new initiative for Ethiopia and the first of its kind in Africa. It aims to revolutionize Ethiopia's tradition-bound agriculture through creating a new marketplace that serves all market actors, from farmers, traders and processors to exporters and consumers.
Photo: UNDP Ethiopia
3
Demelash Gebeyehu (center) is a trader at the Exchange who represents the Admas Cooperative, a sesame seed farming cooperative based in Ethiopia's northern highlands. Gebeyehu is conferring with Cooperative shareholders and board members Almaw Gashaw, 45, and Ayalew Birhanu, 34, before the Exchange opens for the day.
The Cooperative joined the Exchange in 2010 after hearing about the benefits of it from other groups. It paid a 105,000 birr membership fee (roughly US$6,200) and has already witnessed a rise in profits from the Exchange's direct sales system, eliminating the loading and loading cost that had totaled as much as 70,000 birr ($4,152) in the past.
Both Gashaw and Birhanu dropped out of school in grade ten and each farm 1.5 hectares of land. Through the economic opportunities provided by the Exchange, they hope to ensure that their children are able to graduate from school; Gashaw says he uses his share of profits to keep all six of his children in school, including private college fees for his eldest.
Photo: UNDP Ethiopia
4
Brokers wait for clients at the floor of the Exchange. An estimated 850,000 farmers — roughly 12 percent of the national total — are now benefiting from the Ethiopian Commodity Exchange. January 2011 marked its thousandth day of operation, with over one billion dollars worth of commodities traded. Today, the Exchange has 450 members, 5,400 clients and oversees an average of 14,527 trades each day.
Photo: UNDP Ethiopia
5
Israel Kenaw (left), 42, offers a bid on the Exchange's floor. He is a partner in a new private company that trades in coffee after being involved in coffee trading for that past 12 years. In the past, he said it was common to wait an entire month to get paid for the traded coffee since the trade involved a long process of moving the product to the buyer's storage and then a quality-control check before a check was issued for payment of goods. The Exchange, however, has ended this delay and Kenaw now gets paid within 24 hours of his trade and his 75 clients can expect to get their money within 48 hours.
Photo: Simon Maina/AFP for UNDP
UNDP supported the development of Ethiopia's first commodities exchange, an innovative collaboration of public and private entities that has modernized agricultural marketing by connecting farmers, traders, buyers and exporters to a one-stop exchange market where they meet face to face. An estimated 850,000 farmers — roughly 12 percent of the national total — are now benefiting from the Ethiopian Commodity Exchange. January 2011 marked its thousandth day of operation, with over one billion dollars worth of commodities traded. Today the Exchange has 450 members, 5,400 clients and oversees an average of 14,527 trades each day.
Women working in a textile business established through the help of UNDP's microfinancing schemes in the Jabal al-Hoss region of northern Syria. Participating women learn new skills that they can then use to improve the local economy. This reinvention of their traditional roles has ensured not only that they are more financially secure but that the women are more respected and valued members of their community. (Photo: UNDP Syria)
As of December 2010 a UNDP-supported project in Syria on women's empowerment and poverty alleviation has been part of a national programme that fosters the improvement of women's lives through a wide range of social and economic opportunities. Implemented by the Ministry of Social Affairs and Labor, in cooperation with UNDP, the project provides a combination of small enterprise support for women, along with life skills training to better take care of their households and children. UNDP also worked with local authorities to encourage male family members to grant inheritance rights to women, enabling women to leverage property rights for access to microloans.
By the end of 2010, the project targeted more than 70 villages, particularly in disadvantaged areas in the north-eastern region, and had dispersed funding to more than 230 income-generating projects. Training was offered to 3,145 women and 40 literacy courses were conducted. The League of Arab States highlighted the initiative as a model for the region.
Armenia who have benefited
from UNDP local development
programmes targeting water,
sanitation, electricity, gas, job
creation, microfinance and
environmental renewal.
entrepreneurs UNDP trained
in Armenia.
Additionally, in each community where UNDP initiates projects, citizen groups work with municipal staff to identify and set budget priorities. Draft budgets are then distributed to everyone and public hearings are organized for debate and discussion, ensuring broad-reaching participation.
As a result, the Ministry of Health was able to produce standard operating procedures to guarantee quality care and treatment for patients. It now has a computerized accounting system and follows standard financial and auditing procedures. Through UNDP support, the National Drug Service now procures and provides HIV and AIDS drugs worth more than $2 million, almost four times greater than prior to the programme. By the end of 2010, more than 150,000 people received counselling and treatment for HIV and AIDS at 114 new centres, tens of thousands of pregnant women were tested for HIV and the Ministry of Health now directly receives and manages its Global Fund money.