Gobi Regional Economic Growth Initiative (GI)
Mercy Corps
www.mercycorps.org.mn
Sales
The Gobi Initiative uses sales generated from new business activities outlined in the formal business plans developed by its clients as an indicator of success. Total sales for herder and non-herder businesses for September 2008 reached $384,262, bringing total sales so far for herder businesses in CY2008 to $1,269,080 and for non-herder businesses to $1,394,512. Total sales for CY2008 are now $2,663,592; still on course to achieve the full year target of $3.9 million and up 20% over the same period in CY2007 (from $2,219,565). Average sales per business are also up 19% (to $8,272 from $6,980) over the same period in CY2007.
Total sales generated by business clients under the Gobi Initiative Phase II from January 2004 to date are $11.6 million, which compares favorably with USAID funding for the Gobi Initiative cooperative agreement to date, less sub-grant agreements, of $5.6 million.
Loans
In September, herder and non-herder clients took out three loans from commercial banks with a total value of $5,652 for which Mercy Corps provided $2,022 (36%) in additional cash collateral. A total of 190 loans were accessed by Gobi Initiative clients in the first nine months of the year. In total these loans were worth $563,196 at an average loan size of $2,964.
Mercy Corps has thus far provided a total of $217,895 as additional cash collateral through CY2008. This represents a 39% collateral guarantee against the average loan; significantly down on the 84% average at the start of the program in June 2004. Since the program began, 741 loans have been dispersed with a total value of $2.01 million. The repayment rate to date stands at 96%.
Market Days/Fairs
During the reporting period, market day events and fairs were organized in all six Gobi aimags in cooperation with the local Aimag Governors' offices, the Standardization and Tax Department, Aimag Food & Agricultural Offices, Chambers of Commerce & Industry and local businesses. The events this year were a great success, attracting large crowds and entrepreneurs from across the aimags. A number of high level visitors attended the fairs including Member of Parliament J. Batsuuri and Small & Medium Enterprises (SME) Technology Specialist N.Bataa from the Ministry of Trade & Industry, who attended the Govi-Sumber Market Fair. Mr. S. Demberel, President of the Mongolian National Chamber of Commerce & Industry and N. Lhagvaa, Head of the Working Committee of the Mongolian Regional Development National Council, were present at the Uvurhangai Aimag Market Day. Other GOM officials including Aimag Governors and the heads of Aimag Hurals attended the Market Days in their respective aimags.
The six events, each lasting up to three days, generated total sales worth MNT 574.9 million ($497,810) for participating businesses and producers. Of this total, GI clients achieved sales of MNT 128 million, largely from sale of vegetables and dairy products at the fairs. Local producers displayed a variety of aimag-made products including dairy items, bread, cookies and pastries, drinks, vegetables, wool & cashmere, hides & leather products, felt products, wood/metal products, handicrafts, and construction materials. Dairy and vegetable products were in the highest demand and sold quickest.
Across the six market fairs a total of 785 local producers and businesses participated. Most Gobi Initiative clients were represented, promoting and selling their goods and services to the general public and commercial buyers in their aimags and from elsewhere. Departments of Governors' offices and local banks from all the Gobi aimags promoted their services and loan products to fair-goers too. During the fairs, a variety of public events were organized alongside the sales stalls including elite animal shows, children's quizzes, sports competitions, raffles, training events and concerts.
Mercy Corps Mongolia covered a limited amount of the marketing and promotional expenses related to these events. The percentage contributed by Mercy Corps has fallen over the years. In CY2008, the Mercy Corps contribution was around 15%, significantly down on previous years. Also, local entities and institutions have taken a much more leading role in the organization of the events ensuring their future sustainability.
BDS providers
Social Business Development Service (BDS) providers in all six aimags expressed their interest in continuing to work with the Loan Guarantee Mechanism in 2009 after the Gobi Initiative ends. In order to make this service sustainable, Mercy Corps has selected an initial five providers and signed collaboration agreements with them to do this. Under the terms of these agreements, BDS providers shall select future clients, train and advise them in the development of comprehensive business plans, provide training and technical assistance to them for successful implementation of their business plans and assist them in applying to financial organizations for commercial loans. Mercy Corps will assist the BDS providers through the transfer of these responsibilities and to implement this program successfully in its early stages.
Gobi Forage
Discussions continue with the World Bank around continued funding to establish Gobi Forage (to be renamed Mongol Forage) as a national program - eventually within a national institution.
Rural Business News magazine
Media for Business (MFB) finalized the draft of its contract with the European Union funded Animal Health and Livestock Marketing project. This process included Mr. Markus Ditges, General Manager of Agricultural Economics Consulting, Gottingen, and B. Batmunkh, CEO of MFB. The contract is to be signed in early October.
Rural Business News (RBN) edition number 63 was printed in September. This edition represents the first issue created by MFB as an independent NGO. The A4 sized, 28-page magazine is host to 13 articles and interviews. Topics explored included 'Directors perform worse when they work as an accountant', 'What is the easiest way to make handmade fodder?', and 'Five things that herders must look out for'. Two thousand copies of the RBN magazine were distributed through Mongol Post's nationwide network and via Xacbank's local branches.
MFB has set up an independent office, located in the Mercy Corps building. The NGO has taken over the radio studio previously run by Pact Mongolia and has employed a part time radio producer. MFB's staff now totals three, including a full time CEO, a part time accountant and the aforementioned radio producer.
Future events
On October 31, GI plans to organize an event in Ulaanbaatar marking the end of the 10-year program. It is envisaged that all current program staff from the aimags and Ulaanbaatar will be invited to attend the event in the capital city to talk about the program's accomplishments and successes, and to discuss future directions. It will be the last event at which all Gobi Initiative staff members will come together under the Gobi Initiative program team. |
