At a recent global forum in Portland Oregon sponsored by Mercy Corps, savings, as opposed to loans, was emphasized as a crucial component to alleviating poverty.

Mongolia’s XacBank was cited as an example of an MFI that emphasizes savings as crucial to alleviating poverty and assisting in economic development. With only 30 percent of Mongolia’s 2.9 million people living outside of Ulanbataar [1], the nations urban capital, few have access to banking.

One of XacBank’s programs, “Future Millionaires” encourages families to open up savings accounts for their children at birth. The accounts pay high interest rates, however no withdrawals can be taken until the child reaches the age of 18. A minimum deposit of MNT 3,000 (USD 2.10) is required to open up the account. Deposits can be made at any time.

Another initiative by XacBank is a savings program backed by Women’s World Banking (WWB) and the Nike Foundation. [2] Started in 2008, the program encourages young girls to open savings accounts. XacBank works directly with the young girls to teach them personal finance at a young age. The program provides savings products, financial literacy and knowledge sharing to promote the economic empowerment of adolescent girls. [3]

Founded in 1998, XacBank provides small loans to yak herders, embroiderers, shoe shiners and others interested in starting a business. In 2008, XacBank assets grew 45 percent and its loan portfolio grew 48.5 percent to USD 106 million with a total of 63,000 loans. XacBanks portfolio at risk (PAR) was at 1.2 percent. The bank holds the highest rating from the Central Bank of Mongolia, and in 2008, Fitch assigned XacBank with a B+ rating. It has 76 branches and extensive mobile banking services. [4] For more information on XacBanks’ mobile banking initiatives please see MICROCAPITAL.ORG’s article [5].

Mercy Corps was founded in 1979. Since that time, they have given over USD 1.7 billion in relief and assistance in 107 countries. Over the last 5 years 89% of their resources have been directly allocated to programs. In 2008, they reported USD 1 billion in net assets and USD 244 million in revenue. [6]

WWB is a global network of 54 microfinance providers and banks, working in 30 countries to bring financial products and services to low-income entrepreneurs, especially women. The network serves 11 million microentrepreneurs directly, and another 14 million indirectly through its bank partners and other regional networks. In 2008, WWB held assets of USD 25 million and produced USD 8 million in revenues. [7]

The Nike Foundation is a U.S. non-profit organization supported by NIKE, Inc., that is dedicated to investing in adolescent girls for change in the developing world. In 2008, the Nike Foundation reported USD 22 million in assets. [8]

[1] http://en.wikipedia.org/wiki/Mongolia#Demographics

[2] http://www.swwb.org/node/522

[3] http://www.mercycorps.org/inthenews/16738

[4] XacBank 2008 Annual Report http://www.mixmarket.org/sites/default/files/medialibrary/20501.38/XacBa…

[5] http://www.microcapital.org/microcapitalorg-story-mongolia’s-xacbank-and-horus-noomadic-solutions-announce-launch-of-mobile-banking-services-for-microfinance/#more-3591

[6] Mercy Corps 2008 annual Report

http://www.mercycorps.org/sites/default/files/MercyCorps_AnnualReport2008.pdf

[7]http://www.swwb.org/files/SWWB_Financial_Statements_2007_08.pdf

[8] http://watchdog.net/ein/931159948/nike-foundation