Yak slippers point to the future of small business

Mongolia

February 22, 2012

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Holding a child's slipper — deep chocolate brown with a strong leather sole — I marvel at the fine warmth of the yak felt and realize this is not just a shoe.

Everything about this item represents the ideas and commitment Mercy Corps has brought to Mongolia for more than a decade. In this simple slipper, I see the reflection of new partnerships, renewed techniques and a recovering economy.

These slippers are the product of a women's business cooperative called Hongoriin Sor in Bayankhongor. In the last four years, this group has secured two commercial loans with the support of Mercy Corps' Loan Guarantee Mechanism (LGM). Mercy Corps provides 100% collateral insurance coverage to ensure new businesses can secure the funds. Since 2005, 2641 rural businesses in 16 aimags, or provinces — nearly half the country — have received 9.5 billion MNT ($7.6 million) to support this kind of business growth and development.

Hongoriin Sor took 7.5 million MNT ($6,000) in 2007 to launch and another 4 million MNT ($3,200) two years later to expand their business. Both loans have been fully paid. Indeed, the LGM has a 97.4% repayment rate over the life of this seven year program.

This success is due in part to Mercy Corps’ partnership with local business development consultants who monitor and mentor each loan beneficiary. They also help businesses like Hongoriin Sor develop solid business plans, consider and test new designs, and use new materials.

And while yaks are far from new in Mongolia, high quality yak fiber virtually disappeared after the political and economic changes in the country during the early 1990s. Once the Soviet-style worker collectives were disbanded, people simply stopped combing yak down to cultivate the raw material. It wasn't until 2007 when Mercy Corps first reintroduced the method through the USDA-funded Rural Agribusiness Support Project (RASP) that the fine and durable fiber again became available for production. Today, the Swiss-funded Marketing Opportunities for Rural Entrepreneurs (MORE) project sustains that effort.

It has taken several years, but yak wool is making its debut in Europe as the next luxury fiber. Hongoriin Sor has forged sales partnerships in Japan, China, Germany and the U.S. Here in Arhangai province in the center of Mongolia, however, the slippers I hold are not a luxury. They are a promise that an open mind and an entrepreneurial spirit combined Mercy Corps programs offering relevant, targeted efforts over time create a wealth of opportunity.