|Client Yondon Nansalmaa|
|Location Ulaanbaatar, Mongolia|
Ulaanbaatar is the coldest capital city in the world. Between September and May, temperatures regularly drop to below -30° Celsius. Families typically live in wooden houses or gers; traditional Mongolian felt tents brought from the countryside.
Yondon Nansalmaa is one of over 700,000 residents in Ulaanbaatar’s ger districts—an expanse of sprawling, semi-urban neighborhoods burdened by low incomes and poorly insulated housing. Struggling to keep warm, most families rely on inefficient stoves, burning 4.5 tons of coal per year. The consequences are twofold: the cost of fuel consumes up to 30% of annual income, and the massive quantity of coal burned contributes 60% of Ulaanbaatar’s pollution—making it the second most polluted city in the world.
XacBank’s loan for energy efficiency improvements meant the reduced cost of fuel was worth more than twice Nansalmaa’s monthly salary, allowing her to spend more on food and other basic necessities.
In the winter of 2010, Nansalmaa endured the winter, like most families, by spending much of her salary on fuel, diverting funds from food, clothing, and support for her children. Alternatives were far too expensive. Fuel efficient stoves cost as much as 350,000 Mongolian Tugrik (MNT), or approximately 250 USD, and other methods of preserving heat—including improved insulation (ger blankets) and door coverings (vestibules)—have market prices upwards of 600,000 MNT (430 USD).
As a senior community volunteer at her local government office, Nansalmaa only earns 140,000 MNT (100 USD) per month, subsidised minimally by her home-based sewing business. At that point, XacBank established a network of product centres throughout the ger districts, each selling energy-efficient products subsidised by the Clean Air Fund of Mongolia and the Millennium Challenge Corporation. XacBank’s mircoloans for these products have relaxed collateral requirements, a reduced interest rate, and flexible loan repayment term – making them more accessible to low-income clients. By installing energy efficiency measures —a stove, a ger blanket, and a vestibule—clients reduced fuel consumption by up to 50%.
For Nansalmaa, the savings and the added comfort provided by energy-efficient products were transformative. The reduced annual cost of fuel was worth more than twice Nansalmaa’s monthly salary, allowing her to spend more on food and other basic necessities. ‘This was the first loan I ever took,’ Nansalmaa explained; ‘I wasn’t confident…I was really pessimistic about the likelihood of getting a loan. But XacBank gave me a loan even though my income was so low.’ The ease with which Nansalmaa was able to access financial support was especially important to her. ‘The bank gave me all the documents and I was able to prepare them in two days.’
Nansalmaa’s experience with XacBank’s energy-efficiency products is one of almost 100,000 households. Collectively, these individuals are making an enormous impact on Ulaanbaatar’s air quality, improving the health and livelihoods of their communities and establishing a standard for environmental consciousness that will be followed for years to come.