Snow Leopard Enterprises: Small Business Enterprises Connected to Conservation

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Snow Leopard Enterprises: Small Business Enterprises Connected to Conservation

Mongolia
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Snow Leopard Enterprises (SLE) helps rural herding communities manage and run grassroots, entrepreneurial handicraft-making businesses. To participate in the program, herders agree to halt the poaching of endangered snow leopards and their prey. In return, the program provides access to trainings, micro-credit loans, cash, and international markets where their goods can be sold.

About Project

Solution: What is the proposed solution? Please be specific!

Snow Leopard Enterprises (SLE) builds the capacity of small, enterprising herding communities in rural Mongolia so they can make and sell wool handicrafts that meet international market standards. SLE provides skills trainings that enable communities to add value to their raw materials by making them into finished products. Then SLE offers low-interest micro-credit loans that individual herders can use to purchase equipment (and that they can repay in cash or products); arranges all shipping logistics; guides herders to negotiate for fair labor compensation; and then pays herders for their products in cash based on mutually-agreed prices. In total, we provide our small enterprise communities with multiple access points to capital that would otherwise be out of reach. The micro-credit component of the program is in high demand specifically because herders in rural, remote areas of Mongolia cannot access standard bank loans. In addition, we link all these activities directly to conservation and make adherence to conservation contracts a community-managed initiative. If all members of the community participate in the conservation goals of the contracts--even if they do not actively participate in making products for the SLE program--we provide a financial bonus to the participants at the end of the year. We set no socio-economic barriers to enter or continue with the program (such as minimum age or household income). Instead we target communities in snow leopard habitat experiencing conflicts with wildlife that threaten their livelihoods. In this way, SLE is sustainable at a community level and helps to stabilize the precarious financial situation of poor families while promoting wildlife conservation.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

By providing Snow Leopard Enterprises communities with training, loans, cash, logistical support, and a regular buyer for their products, participants often increase their household income by 25% and even up to 40%. The income from Snow Leopard Enterprises is paid in cash directly to the women who make the yarn and handicrafts. Most women use the money to purchase bags of rice and flour, sometimes salt and tea, and if possible, other food to supplement the meat and milk from their livestock. If they are able to earn more, they use it to send their children to school, and to buy medicines for their families. For example, prior to joining SLE Oyuntseren who lives in Tost bag, a village in Gurvantes soum of the South Gobi Province, made only about $118 per month, which is less than $6 per day for herself and her three children. Today, Oidov is the local coordinator for the Snow Leopard Enterprise program in Tost bag, and although she does not have her own livestock, she makes camel wool yarn using the wool from her community members, and she is a great organizer of the women. Recently, her community of 15 households made more than $1,000 worth of products to suppliment their livelihoods. She says “As a single mother, I am very grateful for the program’s usefulness and support. The money is very helpful. The women in my community all work together on this program, and being able to help other women in my community helps me in my own life. We are so happy for the program.”
About You
Organization:
International Snow Leopard Trust
About You
First Name

Siri

Last Name

Okamoto

Website
Your Organization
Country
About Your Organization
Organization Name

International Snow Leopard Trust

Organization Phone

1-206-632-2421

Organization Address

4649 Sunnyside Ave. N. Suite 325, Seattle, WA 98103

Organization Country
Organization Type

Non-profit/NGO/Citizen-sector Organization

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Your solution
Country your work focuses on

, XX

If multiple countries, please list them here. If your solution targets an entire region, please select it below

Multiple Provinces: Omnigovi, Govi-Altay, Uvs, Hovd, Bayanhongor, Bayan-Olgy, Ovorhangay

Region(s) your solution focuses on:

Europe and Central Asia.

Range of turnover in your target firms, in USD

Less than $1 Million.

Average turnover in USD of your target firm

$15,700

Number of employees in your target firms

More than 150.

Average number of employees of your target firm

243

Specify the size, average and range of expected loans or investments in each target firm

International Snow Leopard Trust works with over 250 individual herders across 26 communities in Mongolia. In 2009, we invested an average of $3,800 in each program community in order to provide them with training, access to micro-credit loans, cash payments for their goods, linkages with international markets, logistic support for processing and shipping their goods, marketing, and finally bonuses for maintaining conservation contracts that link the sale of their goods to snow leopard conservation.

What stage is your solution in?

Operating for more than 5 years

Innovation
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.

Impact
Provide empirical evidence of your proposed solution's success/impact at present. If your project is in the idea phase, please provide evidence that speaks to its potential impact

In 2009, herders were able to produce over 9,000 products, which were sold in over 70 stores worldwide, showing that we have been able to successfully train them to make competitive products and connect them to world markets. Many SLE participants identified 'having a job' or 'learning a skill' as important reasons for belonging to the SLE program. 96% of participants know that their products were sold in the USA or abroad and they are 'proud' or 'happy' that their work was sold in foreign countries. We have been able to provide 119 herders with micro-credit loans totaling more than 22 million Tugriks ($22,000 USD).

How many firms do you expect to reach?

We expect to reach at least 250 SLE participants in at least 25 communities. We expect to sell their products through 70-80 retail outlets worldwide. To accomplish this, we will work with an NGO partner in Mongolia: Snow Leopard Conservation Fund.

What is the volume of private SME finance you aim to catalyze?

In 2010, we project spending $134,000 on the SLE program in order to accomplish all the acitivies we have described. Roughly $25,000 of this will go directly to herding communities as cash payment for their products and adherance to conservation contracts.

What time frame will be required to reach these targets?

The targets above should be reached by the end of 2010. New targets for 2011 will be set in October and November, but should be similar to 2010 targets.

Does your solution seek to have an impact on public policy?

No

What would prevent your solution from being a success?

As mentioned, Snow Leopard Enterprises (SLE) is inextricably linked to snow leopard conservation. Participants are required to sign conservation conracts stipulating their complete cessarion from snow leopard poaching. Instances of poaching have caused communities to lose the cash bonus they would otherwise receive for adhering to their contracts. However, poaching instances have been rare and loss of bonus monies has proven an effective deterant. In order to maintain this success, the Snow Leopard Trust hopes to introduce more education and awareness building so that communities more thoroughly understand the importance of conservation.

Sustainability
List all the funding sources that are required for the sustainability of this solution

Private funding is a necessity in order to sustain the SLE program. We work to solicit private funding from foundations and individual donors. Foundations such as David Shepherd Wildlife Fund and Disney Worldwide Conservation Fund have supported it, and now we seek support from G-20.

Demonstrate how your proposed solution has the capacity to graduate from dependence on public finance. What is the time frame?

Our proposed solution is not dependent on government finance, but relies heavily on donations from the general public. We have found that people appreciate the opportunity to donate to a cause that helps both communities and the environment. To help ensure the financial sustainability of Snow Leopard Enterprises (SLE) over the long-term, we constantly adjust product retail prices to fit various markets, source new retail outlets, develop new products, and look for ways to reduce shipping costs. For example, in 2008 SLE introduced a new fiber—yak wool—into the production line and trained herders how to process it. In 2009, communities suggested some new products they could make, and we tested them with great success. In 2010 we began exploring ways to consolidate product collection from the communities to improve in-country shipping logistics.

Demonstrate how your proposed solution will survive a potential loss of its largest private funding source

Loss of funding means we would have to review our program goals for the year and revise them based on available funds. Decreased funds could cause us to scale back the number of services or projects we manage. Luckily, large components of SLE are self-sustaining in that they have the funding necessary to run at a local level. Private donations make it possible to manage, monitor, expand, and connect SLE on an international scale. Therefore a severe lack of funds could limit the extent to which SLE can function appropriately, or the number of markets it is able to reach. The program would downscale to a national or provincial level, and communities would likely be faced with earning decreased income. Along with our Mongolia NGO partner, Snow Leopard Conservation Fund, we are exploring local outlets for selling SLE products in Mongolia.

Please tell us what kind of partnerships, if any, could be critical to the greater success and sustainability of your innovation

As mentioned, in 2010 SLE will cost rougly $134,000 to run. Each year, the International Snow Leopard Trust must search out this funding. The program would benefit from a long-term funding partnership that could cover its basic operating costs over the course of multiple years. This type of financial stability would enable us to focus our resources on program improvements. For example, last year was the first time we were able to bring our SLE staff together to discuss best practices and program improvements. Such "all-staff" meetings, while critical and standard for most businesses, required such a concentration of effort and funding for the SLE program that two seperate grants were necessary to make it possible and it was considered "outside" of general operating costs.

Are there non-financial issues that could threaten the sustainability of your proposed solution?

No.

Please tell us if your proposed solution aims to scale up through a high growth sector, expand immediately to multiple sectors, and/or scale up geographically

Snow Leopard Enterprises (SLE) was built to be scalable and replicable. For example, the program has been initiated on a very small scale in Pakistan and Kyrgyzstan. In Mongolia, we have plans to expand the program slowly with a tentative goal that by 2020 upwards of 800 people could be participating.