How does your proposed innovation leverage public intervention in catalyzing private SME finance?
Snow leopards, related wildlife, and the habitat they use are all important natural resources for Mongolia. Protecting these resources is not only important on an environmental level, but also on an economic level (e.g. ecotourism). Snow Leopard Enterprises (SLE) leverages the participation of multiple agencies to strengthen the program's link between conservation and income generation. The program involves local Mongolian NGO staff for implementation, and national park rangers and environmental inspectors to monitor how communities comply with SLE's conservation contracts. These contracts are at the heart of the SLE program: they are the agreement stipulating that in return for receiving economic support from the program, participants will help with wildlife conservation. Since the daily operations of SLE are managed at a community-level, the program works closely with many provincial government officials who provide guidance and leadership for their region. Finally, in 2008, the federal government in Mongolia granted the International Snow Leopard Trust permission to conduct research on snow leopards in the South Gobi, one of our oldest and largest SLE program areas. We have leveraged this opportunity to generate more interest in snow leopards and SLE, which in turn has led to more private support for the program.
What barriers does your proposed solution address?
Lack of SME access to skills / knowledge / markets, Unavailability of financial products tailored to SME needs, Lack of financing to women entrepreneurs.
If you checked any of these barriers, describe how your solution addresses them
Lack of SME access to skills/knowledge/markets.
Our solution: Many entraprenuers in remote snow leopard areas survive on the equivalent of just a few hundred US dollars each year. Lacking transportation and access to markets, many are forced to sell their raw wool to traveling traders for just pennies per kilogram. What’s especially frustrating about this is that their raw wool--and the handicrafts they make with it--are in high demand throughout the world. Once wool is processed and wound onto skeins, its value increases considerably. Whoever processes the wool makes most of the money from that wool. Raw camel wool, for example, is sold at an average of $2.70 per kilo in Mongolia. If this wool is turned into yarn and wound onto skeins, it can be sold at about $13.90 per kilo. We faciliate trainings for rural communities, meeting them in their regions instead of requiring them to come to us, and faciliate transporting their finished goods to Ulanbaataar.
Unavailability of financial products tailored to SME needs.
Our solution: many herders in Mongolia cannot access traditional bank loans. So that they can purchase expensive wool processing equipment, such as spinning wheels, we provide low-interest micro-credit loans with flexible repayment options. Our micro-credit loans include 10% interest for three years, which is much lower than the 18% banks offer. Herders do not need to meet any socio-economic requirements in order to access these loans or provide collateral. We travel to communities to collect loan payments, so herders do not need to spend time and money traveling to city centers to reach a bank. We also accept payment in cash or in finished wool products. With the equipment purchase through these loans, SLE communities are able to produce and sell more products.
Lack of financing to women entrepreneurs.
Our solution:90% of SLE participants are women. All the services listed above are available to the women in the program. Women in Mongolia are generally well-educated and are unaffected by many forms of gender discrimination. However, their main decision-making role is traditionally dominated by men, and one form which women have previously been largely excluded. Through SLE, women are empowered economically and through that are able to also take a more significant role in environmental decision-making.