XacBank Deepens Outreach through IGP: Mongolia

This paper discusses the new microfinance product developed within the implementation grant program (IGP) of XacBank. It presents the role of the USAID program implemented by XacBank in expanding opportunities for marginalized communities in Mongolia. The paper elucidates the demand and also the current supply of financial services in remote rural areas including:

• Existence of few commercial banks;
• Sparse presence of savings and credit cooperatives (SCC).

It then describes a development guide franchise service aiming to help rural residents to meet their need for financial services through:

• Training residents for establishment of rural SCC;
• Capacity building of the existing SCC;
• Provision of office equipment for new SCC;
• Providing advisory and other technical support for SCC.

The paper explains the achievement due to the offering of new financial product:

• Establishment of 51 SCCs in rural areas;
• Innovative Microfinance Product of the Year Award at Global Micro-entrepreneurship Awards ceremony;
• Expansion of branch network of XacBank from 23 to 53;
• Expansion of rural capacity by serving 180 remote areas through mobile banking services.

The paper also highlights the effort by XacBank to attract depositors:

• Maintaining clean premises and renovating branch offices;
• Retaining highly qualified and motivated staff.

Finally, the paper concludes by stating that XacBank is viewed as a successful model for extending credit services to underserved areas.