Hope through Cooperatives
In one picture you can visualize the growth, environmental impact, and social and economic inequities. But the feeling is indescribable. There are 3 million people in Mongolia; nearly one third living below the poverty line, many surviving on a $1 a day - not to mention the added hardship of "Saskatchewan-like" winters. The last few winters have been particularly hard, wiping out many producers livestock. As a consequence these herder nomads are literally setting up camp outside Ulanbataar, forced to give up their herder heritage in hope of finding work.
Some hope is being found through cooperatives. In fact, the Mongolian Government has began a three year campaign on cooperatives as a means to help rural communities and close the growing economic disparity.
There are now nearly 2,500 coops in Mongolia, employing 59,000 people and involving 210,000 members. That said, only 8% of these coops are credit unions. Access to credit and financial services remains a significant barrier for many of these coops, agriculture produces, and individuals: "building dreams" is tough without money. Not unlike other financial systems, the Mongolian financial sector nearly came to a collapse during the financial crisis. What emerged was a banking environment not willing to lend to cooperatives and the "unbankable". The credit union system hopes to fill this need. But the challenges to establishing a viable and strong credit union system are daunting particularly in light of a precarious beginning and a financial crisis that left mistrust in any financial service provider. The first credit union in Mongolia was established in 1996, and legislation was introduced in 1998 (with the help of Canadians).
It took us over 100 years to get us where we are today. It is with the benefit of this history and the work of those who came before us [in building our system] that we can help the Mongolian cooperative movement. As a person routed in a cooperative culture and movement, I feel privileged to share Conexus' experience.
First thing Monday morning we met with our hosts MCTIC (Mongolian Cooperative Training and Information Center), along with others involved in their cooperative movement: head of savings and CU department of FRC (federal regulator), executive director of MOCCU (Mongolian confederation of savings and credit cooperatives), and representatives from local credit unions. Mr. Purev from the FRC asked us to consider two things during our work with credit unions:
Solidify the common goal of credit unions - support and improve the economic and social situation of its members, through enhancing member services.
Help in establishing internal controls, audit processes, and governance to ensure the safety of members money.
It is my assertion that once the credit unions have adequate internal controls and governance, new legislation will emerge, most notability a deposit guarantee giving confidence to the system, and propel the system in its goal to support the social and economic situation of its members and communities.
|From 2,000 feet over Mongolia|