Travel Report: Our colleague Jorge’s visit to Mongolia
Written by Jorge Vilar on 26 September 2023
Ever had the desire to visit the entrepreneurs you invest in through Lendahand? Me too, and now, I finally had the opportunity to travel to Mongolia with our Investments Team.
In order to ensure the impact of the crowdfunding projects on our platform, it is sometimes necessary to visit the companies we work with. We call such a trip a due diligence trip and, when possible and justifiable, a non-investment manager of our team can join to see the impact we help create.
For the most recent due diligence trip to Mongolia, I got to swap my day-to-day tasks as Operations & Knowledge Manager at Lendahand for a couple of days. But not without a thorough briefing from the Marketing team to come back with stories to share with you, our valued investors.
Here are my impressions and takeaways from our trip.
Mongolia is not a regular on travel bucket lists. Nonetheless, when we arrived in Ulaanbaatar on Sunday I was happy to have the time to see the tourist highlights around the capital, such as the Zaisan Memorial and ChinggisKhan Statue - Tsonjin Boldo.
On Monday morning, we conquered the hustle and bustle of the city, which is similar to any major capital with big skyscrapers and busy commuters. Our first stop was the InvesCore Headquarters.
At the heart of InvesCore
Microfinance Institution InvesCore has been actively attracting financing on Lendahand since 2022. They typically help local small and medium entrepreneurs secure the necessary working capital to drive their businesses forward. InvesCore is a Non-Bank Financial Institution, which means it benefits from a less strict regulatory framework than commercial banks.
Small and medium enterprises (SMEs) represent approximately 86% of all active legal entities in Mongolia. These companies are fundamental to job creation, poverty reduction, and community empowerment. Yet, many entrepreneurs, especially women, face considerable financial barriers.
InvesCore works on bridging the funding gap for many entrepreneurs by offering business loans for working capital, amongst other financial products. The financial institution also has adopted and introduced innovative fintech services to democratize access to funding. Their automation of the traditional loan process has not only reduced 80% of manual work and potential errors but also expanded their reach. In 2021, this led to over 1,200 SME owners, of which more than 250 were female entrepreneurs, securing business loans.
Together with the InvesCore team, we hit the road to visit a couple of inspiring entrepreneurs who received business loans through the financial institution to invest in their companies.
Meet The WoodBros
When you decorate your home in Mongolia, a wooden map on the wall of the places you either visited or want to visit is a musthave. Following up on this trend, three ambitious young students started cutting and engraving wood by hand in 2017. Today, their passion project turned into a full-blown business where all three work full-time.
Their big break arrived in 2022 when, with financing from Invescore, they managed to rent a small garage on the outskirts of Ulaanbaatar, and equip their workshop with a laser engraver, a cutting machine, and a specialized computer for modeling.
Comes Christmas, the WoodBros have to stay on top of the many orders coming in through their social media accounts. Christmas ornaments are in high demand and during such periods of time, they hire temporary workers (mainly students) to help finish orders on time.
The WoodBros managed to fuse tradition with modernity, ensuring that Mongolian walls tell stories more vividly than ever.
Coffee break at the TamTaúrarb Cakery
Just in time for a well-deserved break from the cold, we arrived at the cakery, where the factory is connected to a pastry shop with a nice sitting area for customers.
TamTaúrarb is a family business that first opened its doors 15 years ago. Today, the cakery has 116 employees of which up to 50 work at the main factory we were welcomed. In the factory, 3,000 kilos of cake are mixed, baked, packed and cooled per month. That’s around 15,000 cakes!
Strolling through the many delicious-looking foods in the making, our mouths were slowly watering. Over a good piece of cake, I learned that the cakery mainly uses InvesCore loans to buy production line materials and the trucks used for distribution.
Sourcing salt from local nomads
Flowery perfume and sweet scents welcome us in Davaarjargal’s shop. She creates and sells naturally produced soaps and bath salts in her specialty shop in the city center of Ulaanbaatar. Her shop is big enough to host weekly workshops on creating soaps and bath salts, helping other women become entrepreneurs.
Davaarjargal sources her raw materials from local nomads, for whom this trade also represents an essential source of income. She can do so thanks to the financial support she receives from InvesCore. Her business loans allow her to purchase all necessary materials at a fair price and expand her business.
After those inspiring visits, the idea behind (micro)financing made renewed sense to me: helping entrepreneurs to have a thriving business means they can have a higher income, which directly improves their lives, but also the lives of their suppliers, employees, creating a ripple effect of prosperity in the local communities.
Our visit to the entrepreneurs who benefit from our projects strikes a cord. Finally, I was face-to-face with the entrepreneurs that benefited or could benefit from our projects. I could talk to them and see the real impact our activities make on others, a once-in-a-lifetime experience.
Besides close monitoring of our existing portfolio companies, this trip aimed to find new microfinance institutions that could benefit from crowdfunding from the Lendahand crowd. We are still working on the contracts and onboarding of another financial institution. Stay tuned, as I hope to be able to share the story of their clients with you soon.
Ready to support Mongolian entrepreneurs with your impact investment? Head to our projects page today.