Micro Economic Development

Ulaanbaatar, Bayanzurkh District Ts. Enkhbat’s experience: as of 10 January 2008

Enkhbat, his wife and their two children moved from the far eastern province of Sukhbaatar to Bayanzurkh district of Ulaanbaatar in 1999. Before emigrating, Enkhbat had been trained as a painter, specializing in traditional painting on leather. He first found work making wooden furniture, but then started noticing that the type of paintings that he was trained to produce could be sold more profitably.

In 2004, with just 100,000 MNT ($85), he started making paintings and selling them in small gift shops. On average, Enkhbat earned between 150,000 and 200,000 MNT ($128 - $170) per month, only slightly above the poverty line of $1 per person per day. Without working capital, immoveable property or other forms of collateral, Enkhbat was unable to get bank support for his business.

In August 2006, Enkhbat enrolled in the MBAUB program, learned to maintain an income statement and developed a business plan for 2007. With a loan of 500,000 MNT ($427), Enkhbat purchased a leather press and increased his working capital. He was able to purchase more materials at a lower, wholesale price, increasing his profit margin. His wife started working with him to produce new products, such as key chains and pen holders.

By the end of 2007, they had doubled their monthly income on average. After receiving further advice and consultation from the local MBAUB outreach centre, Enkhbat received approval for a larger loan of 800,000 MNT ($684) at a lower interest rate. Enkhbat and his wife saved enough income to purchase their own small plot of land and registered with the Ulaanbaatar city administration, a difficult and time-consuming process. In 2008, Enkhbat plans to further train his oldest son in painting and to set up a small souvenir shop.