Life and Culture; the Mongolian Way

Day 5 - Friday

Today we got to the credit union early.  We spent sometime with the lender first thing in the morning; sharing with each other loan origination practices.  The credit union's delinquency ratios are good, even by our standards.  Afterwards I take sometime to finalize my final report and recommendations.  By mid day we debriefed with the CEO and the accountant as to our recommendations.  It can be a delicate situation: wanting to do the best for the credit union, it members, and community, while not offending either from a cultural perspective or expertise.

The weekend has arrived. It has been a long, challenging, and tiring few days.  Now we have some down time.  The credit union has arranged a weekend for us.  All the staff and their spouses join us.

By three o'clock in the day we leave for a national park to the west and a lake, Altai tavan bogd national park and khoton nuur.  It was quite the journey, the terrain is extremely rough, rocky, and steep at times.   In some cases, no bridges, the Russian 4x4 van pushes through the rivers.  There are frequent stops along the way.  Stops to drink vodka, stops to meet those passing by and exchange some items, and stops just for a break.  The fastest we go is about 40 km/hr.   In all it takes about 5 to 6 hours to travel 80kms.

We break for supper (horse meat) and to fish, and of course more vodka.  

We arrive at the lake/river around 9 pm.  The wind coming down off the mountains is cold.  We set up camp then drink more vodka.  Despite being well dressed...woolies, touque, mits, jackets I would wear at home in winter, I am frozen before I even get into the tent.  Even though I thought I was prepared, it is a different reality here.  The higher elevatation and lack of wind break somehow make it feel colder.  I am so cold it is difficult to get to sleep.   I shiver most of the night wishing I had brought my down sleeping bag.

Day 6 - Saturday

Saturday.  A new day.  No work today.  We get permission from the Mongolian border guards to enter a region along the Chinese border.  The path is rougher than ever.  When we arrive the site is magnificent.  It soon begins to rain.  It is cold but bearable.  We start a fire with what branches are laying on the ground.  There is little wood in this region.  I learn that the fire is for cooking not to keep warm.   I try to add wood but am told to stop. Wood is a scarcity, and they only use what is absolutely necessary.  I think about home, and how if I were there I would have a huge fire.  It is a contrast at so many levels...waste, necessity, availability of resources.  What we take for granted, to them is the necessity of life...giving consideration to future years and others that use this area either for liesure or nomadic herders that may call this place home for a few months a year. 

After lunch we climb a nearby mountain.

We leave late, around 7 pm.  Everyone is exhausted.  We return to town to sleep just after midnight.  The next day it is back to work.

Day 7 - Sunday

In the morning we leave to another town, ulankhus, to start work with the next credit union.  On the way into town we see some herders moving from where we just were for the weekend to somewhere near here.  They have come to spend the winter, where there are shelters and food for the herd.  It is amazing and humbling to see these nomadic producers on the move, carrying all their earthly possessions on just a few camels.  Their gers are a compact, yet versatile living quarters.  I have yet to see in a ger, but understand they have some new age comforts - like lights and a television powered using a portable solar panel.

We stop the jeep to get a better a view.  Our credit union friends ask if we can ride one of the camels.  They graciously agree.  The poeple never cease to amaze me; so kind, helping, and selfless. 

Shortly after we settle into our room, we go to the credit union.  Another work week begins. We meet the staff and the CEO.  The credit union was established in 2009. At the end of the day, we ask for a quite evening.  We are exhausted.

The credit union's logo.  The CEO made it himself.  A recognizable take on the "hands and globe", but rather than a globe...a ger. 

Tomorrow should bring a better blog, once I have had some rest.  

The Eagle Hunter

Day 4 in Mongolia

Tsengel SCC - Second day

The time is passing slower than what I had anticipated.  I have only been in Mongolia for 4 days.  The days are long and busy, not much time for rest.  I am up much earlier than usual, waking early to sounds of russian jeeps racing through town.  But I feel well rested...the nights are dark, quit and cool.  After washing in the basin in my room (no running water), I begin with adding to my report from the prior days work with the credit union.  We generally start at 9 am and go to 5 or 6pm.  Then on to some social event or activity.  I fall asleep very fast...unusual for me.

The weather is turning colder.  I am cold all day.  With the cold brings the smell of burning dung in the air.  There is not much wood or other fuel sources.  Oddly enough the smell is relaxing and what I will remember most of this beautiful land.  When I go out to the toilet at night I wear my head lamp, I can see the ash in the air reflecting off my light.  I am nervous going out to the toilet at night because there are wild dogs (likely rabid) all around scouring for garbage thrown out from the day.   The barking of many others in the distance.  Dogs are not my best friend at home.  I walk anxiously, fearful I will see that blue reflection in there eyes from my head lamp.  It occurs often.  They just continue about their business.

The days are gratifying.  A sense of accomplishment after each day.  I look forward to each day working in the credit union.  The main issue facing the credit union is attracting deposits.  A difficult challenge as mistrust hangs in the communities.  It will be a significant challenge to their plan for growth.  The credit union is anxious to grow.  After some discussion on how they can over come this mistrust and strategies and tactics for attracting deposits.  I turn to Conexus.  I share with them how we source deposits, and how we manage funding needs.  I was reluctant to go in this direction, after all they are a world a way and a fraction of our size.  Surprising the tactic works.  Ideas flow and we are able to adapt for their needs...after all we are both credit unions with similar goals.  We put somewhat of wealth management idea together...thanks Lance.

At lunch, we take a break.  We visit an eagle hunter.  The hunter takes the eagle from the mothers nest at birth.  After 14 years, the eagle is released back in the wild.  This eagle is 8.  Can't say I do that on my usual lunch breaks.

Building a Credit Union

Day 3 - Mongolia

Tsengel hugjil SCC - first day at credit union.

As we walked to the credit union through the dry hard and very rough stone and dust roads I was amazed by the number of kids.  Girls walking hand and hand with white puffy bows in their long braids; and dads walking with their little boys holding hands, a shining example of the importance of family.

We arrived at the credit union at 9:30.  The credit union was very nice inside, proudly showing pictures and awards from community events.  Everyone was smartly dressed, wearing suites; but me, feeling a little embarrassed - wearing a golf shirt and kaki pants.

The CEO, Mr. Baibolat, provided an overview of the credit union.  The credit union was established in 2004 by Mr. Baibolat and 25 other founding members.  We met with the Board and staff.  The current board were all original founding members.   I smile, as one of the board members reminds me of someone I worked for in our credit union system in Saskatchewan.  I tell the gentlemen the story and he laughs - and now says he is my boss.

The board shares the story of the credit union's establishment, beginnings and its amazing success in just a short few years.  This is incredible given the mistrust that exists among the people in the financial sector - but most of all the credit unions.  In the late 90's people opened financial service outfits, and called themselves credit unions - having no proper incorporation or governance.  A number of these so called credit unions failed or were shut down by the government - many people lost their savings.  Building this trust again remains a challenge for the credit union.

The board then peppers us with questions, asking about Conexus' strategies, how to grow, about dividends, tax, and building trust to name a few.  It was amazing to experience such emotion and passion in building this credit union.

At the end of the day, many board members return, along with a local government official from the province's governor office.  The CEO pulls out a 26 of scotch whiskey, a female staff member comes in and begins pouring everyone drinks.  We drink the entire bottle (customary to finish the bottle) and take turns toasting.  Toasting is not just a few words to good health or prosperity, but long philosophical stories consisting of thanks, praise, quotes, and ideology.  I have the opportunity to do two such toasts.  In my second I make up for my first: my first being about only 60 seconds, I go on for at least 5 minutes the second time round - but it becomes easier the more one drinks.  This form of relationship building is an important part of the culture, but also central to the credit union that put significant on relationship and trust.

What was most enlightening for me was to experience the beginning of a credit union.  Stories of our history which I can only read about.  Listening breathed new life into me; enthused and motivated more than ever to be part of the credit union system and continue to build its strength.

Mr. Bailbalot invited us back to his house for dinner.  His wife prepared an amazing spread, which we washed down with fermented mares milk and a bottle of vodka.

Hope through cooperatives

Day 1 and 2 in Mongolia

Hope through Cooperatives

 Arrived late last night (Sunday night), after approximately 32 hours in transit.  Our hosts in Mongolia were at the airport to pick us up.  As we drove from the airport it was already evident to see the disparity between the have and have not.  In the city there are more Hummers, G wagons (Mercedes SUV), and Range Rovers than there are gophers in Saskatchewan.  Around the city, ger districts.  There is a risk of this proportion and disparity widening as the Mongolian economy emerges.  As a finance professional we learn and read about emerging economies but to see and experience it first hand breaths life into the meaning.  The GDP at about 7% is set to accelerate to over 20% as a major copper mine comes on line.  Production of this single mine is projected to contribute to a third of the countries GDP.

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



On Tuesday morning bright and early (4:30 a.m.), I am off to the credit unions with which I will work. As I fly over while typing this, the landscape formidable but beautiful, I excitedly look forward to departing our credit union knowledge with the people of Mongolia.  I understand there is no Internet connection where I will be staying.  To be honest just hoping for a warm bed as I didn't bring my big sleeping bag - our guide was carrying one.  So, the next time I will post (unless I can connect with communications via phone) will be in about 8 days when I return to Ulanbataar.

Enjoy the week ahead.

Neil,

Cooperatives the Best Kept Secret

Today was the first day of a three day training stint with CCA in Ottawa.  The day was full, discussing everything from coops 101 to gender equality.  But aside from training I was thrilled to meet so many people passionate about cooperatives.  The stories shared were powerful messages about the importance of cooperatives and reminders of the differences they make in peoples' lives and their communities.  After realizing the social and economic impact that cooperatives have around the world it is no wonder that the UN took notice and named 2012 the international year of cooperatives.  

What stood out the most today was when someone said "I no longer like the term coops are the best kept secret."  I would agree.  The challenge is how do we tell others and more importantly what do we tell them.  How do we define what makes us (cooperatives/Conexus) different.  

To start, cooperatives, including credit unions, have long been regarded as socially responsible.  Examples are numerous: donations, active participant in the community, volunteer time.  However, social responsibility has become a common theme and many businesses adopting for PR reasons. It is becoming a crowded place, which was once dominated by coops.  Are we losing the advantage of being socially responsible?  Many discussions centered on the cooperative governance model as the differentiator:  the voice of members, one member one vote.  I hope to gain some perspective on the cooperative difference in Mongolia:  how the credit unions are making a difference, and what draws the people to a credit union system that is just emerging.  How would they define the credit union experience.    

The Beginning

By now you likely know that I volunteered with the Canadian Cooperative Association (CCA) to be part of their international credit union coaching and mentorship program.  I will be sharing my ‘Conexus experience’ and other credit union system knowledge with the leaders of Mongolian credit unions.  It is my hope that these experiences and knowledge will help them as they build their credit union system – after all, we share similar goals as cooperative financial service providers:  meeting the financial needs of our members and strengthening our communities. 

I am most excited to learn about their credit union system and the relationships that exist between the credit union and their members, and their communities.  We all have something to share. 

My itinerary goes like this:  depart for Ottawa September 4^th for 3 days of training at CCA; arrive in Mongolia Sunday September 9^th; visit two credit unions – about 1 week each; arrive back home Sunday September 23^rd, back in the office Monday.  The credit unions I am partnered with are:  Tsengel Hugjil and Biluu Khugjil.  Both credit unions are in North Western Mongolia.  Each credit union has just under 1,000 members. 

I would like to promise that I will post something every day, however this will likely not be possible. 

Lastly, but most importantly, thanks to Conexus for supporting me and this initiative.   Thanks to all corporate finance staff for covering while I am away.  Thanks to communications and IT for keeping me connected so that I can keep in touch with everyone at Conexus.  Thanks to my family for letting me go.