Mongolia Success Story: Microfinance Grows Enterprises

pork processerMongolia Success Story: Microfinance Grows Enterprises

N. Erdene worked for years as an employee in a pork meat processing firm in Darkhan, Mongolia. Following a brief stint as a taxi driver in the nearby city of Erdenet, he decided that the time was right in 2005 to start his own home-based business in smoked pork production with savings of approximately $135, which he used to purchase a first round of raw pork meat.

In October of that year, Erdene paid his first visit to USAID's Growing Entrepreneurship Rapidly (GER) Initiative branch office in Erdenet. The GER Initiative, implemented by CHF International, provides business development service to residents and businesses located in Mongolia's peri-urban "ger" districts, areas surrounding Mongolia's urban centers that are home to migrants from Mongolia's vast countryside.

Having heard of the GER Initiative and the trainings available, through television advertisements, Erdene attended GER's start-up business training, where he learned about things that businesses should consider when starting, basic business management practices, and basic financial management. As a follow-up, Erdene then attended GER's loan training to better understand the lending process, relationships with banks, and how to manage a loan properly.

With his new training, the GER Inititative was able to facilitate a loan through a local partner bank of approximately $235, which Erdene used to purchase additional working capital. Following successful repayment of this first loan, Erdene receive a follow-on loan of $675 that he used to improve his workspace and purchase working capital.

With his new venture up and running, he continued his collaboration with GER Initiative, marketing his products locally during several GER-sponsored trade fairs and through business linkages with pig farmers to increase his meat supply and with several local restaurants and small grocery stores, which now purchase his smoked pork products regularly. The assistance of GER Initiative business advisors also allowed him to learn how to accurately measure his costs and set proper prices for his products, therefore increasing both his sales and profit.

In 2007, he received yet another loan in the amount of $2,300, to continue the expansion of his operations and allowing him to hire a full-time employee.

The growth of his business now allows Erdene to compete throughout his new home city of Erdenet and supply even the largest grocery store chains with high quality smoked and processed pork products.