Photo Blog: Investing in Women’s Entrepreneurship in Mongolia

In Mongolia, informal businesses make up a significant portion of the business sector, and play an important role in driving the vast country’s local economies. While the female-to-male labor force participation rate in the formal sector is relatively high compared to other countries in the region, steep challenges for women in business remain in the areas of developing solid networks, gaining technical information on how to develop and grow a business, and accessing financial support for entrepreneurial activities.

The Asia Foundation recently opened the first-ever Women’s Business Center Incubation project, funded by the Korea International Cooperation Agency, to support a rising number of women-owned businesses, and to provide an enabling environment for women entrepreneurs to receive high-quality business support services.

As we mark International Women’s Day, we followed one of the clients of the new business center, 60-year-old Gerelee (who two years ago started a micro-business in the capital, Ulaanbaatar) to learn about the challenges in starting a business, and the impact that the center has had on her ability to expand her business and grow her profit. Photos by Davaanyam Delgerjargal

Like many Mongolians, Gerelee migrated from the countryside to Ulaanbaatar in 2002 in search of economic opportunity. Once she had moved, Gerelee applied for a loan to open a small business but was rejected three times—the first time because she had no collateral, the second time because she had a low credit rating, and a third time because she was retired. This is a typical cycle of events for women entrepreneurs in Mongolia, even though women-owned micro, small, and medium enterprises make significant contributions to the economy. Women entrepreneurs face a range of financial and nonfinancial challenges in realizing their growth potential and, according to an Asia Foundation survey, are more likely than their male counterparts to cite access to finance as a major or severe constraint on their business operations.

Despite being rejected for the loan, Gerelee persisted and tapped into her savings to start a small cooperative, using second-hand materials to make and sell household products such as gloves from old clothes, stoves out of old oil barrels, flower pots from used tires, and stools, bins, brooms, and sieves from plastic bottles. Gerelee’s business provides a source of employment for her husband, son in law and two daughters, one of whom is a single mother to three children who was unable to find employment until now. The cooperative also provides employment for two additional women from the neighborhood with disabilities who found themselves in a similar situation to Gerelee’s daughter.

Mongolian winters are long and harsh with temperatures dropping to -30 degrees Celsius. Instead of burning coal for heat, her family burns pine nut shells and wood fragments, which are free of cost and more environmentally friendly. In the summertime, the cooperative grows its own vegetables to sell in the neighborhood grocery store. Many members of Gerelee’s neighborhood struggle to afford items for cooking and cleaning, so she uses a system where people can take the items they need and pay later when they have the money. Here, Gerelee holds some of the small wood fragments that her family burns during the wintertime to keep warm.

In September 2016, Gerelee joined the Women’s Business Center to help expand her existing business. The center has helped her gain access to new markets, link with other women starting their own businesses, and increase her profit margin. Gerelee has used the Women’s Business Centre training courses and consulting services on product innovation, creative marketing, accounting, formulating a new business plan, and improving customer experience. Through these courses, she was able to turn her existing business into a more profitable venture. After participating in a training on product innovation, Gerelee consulted the WBC staff, and with their assistance created a three-in-one product consisting of three small bags of barley, traditional butter, and traditional oatmeal in one large bag. Initially, Gerelee was selling each of these products in one-kilogram bags but has found the new product sells much better.

Gerelee sells her products at the recent WBC pop-up shop for the Mongolian New Year. Gaining access to financial services was one of the biggest hurdles Gerelee faced in starting her business, and the WBC helps address challenges that women entrepreneurs like Gerelee experience in accessing financing. Through the project’s partner organization, the Golomt Bank, the WBC provides mentoring, ongoing loan training, and loan advisory services. In this way, the project seeks to reduce the barriers women face when accessing a loan and increasing their access to financial services.

By strengthening women-run micro, small, and medium businesses like Gerelee’s, the Women’s Business Center is expanding economic opportunities for women entrepreneurs and women employees that will result in growing investments, a more diverse economy, and more competitive industries across Mongolia.

Ashleigh Griffiths is an economic development officer for The Asia Foundation in Mongolia and is currently participating in the Australian Volunteers for International Development, an Australian Government Initiative. Uyanga Sainbayar is The Asia Foundation’s Project Support Officer for women’s empowerment in Mongolia. The views and opinions expressed here are those of the authors and not those of The Asia Foundation or its funder.