BUSINESS DEVELOPMENT SERVICE ASSESSMENT REPORT

As all business operators that were involved with survey, have VCD players at home, so
they were interested in distance training (VCD) along with classroom training. Regarding
the VCD distance training, business operators should be more interested in topic such
as dairy processing, bakery recipes and technology, fruit jam making, vegetable salad
technology, cucumber preserving, hairdressing styles, irrigation system and its functions.
They want the video training to be simple and easy to use so that they simply follow the
instructions in their day-to-day businesses. Business operators might be possible to pay
2800-3300 MNT for a VCD containing training videos.
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Access to financial service
In terms of financial services, 17 respondents work with only one financial institution, 8
works with 2 financial institutions and one works with 3 financial institutions. A total of 25
business operators use Khan Bank financial services. 17 respondents working with one
financial institution, only one works with Xac Bank, while the remaining businesses all
work with Khan Bank. This might be deeply connected with the fact that that particular
soum has only one bank operating. Aside from Khan Bank, there are 5 businesses that
use Xac bank services, 1 works with Zoos bank and 1 relies on the local SCU. It was
observed that the total loan amount that was disbursed to businesses were different
according to where the business is from (aimag center of soum center) and type
(herding or non-herding).
Table 2. Total loan amount disbursed to rural business operators, average interest
Type of
business
Average of
maximum amounts
of local disbursed to
businesses
Average of minimum
amounts of local
disbursed to
businesses
Average of
maximum
interest rates
Average of
minimum
interest rates
Herding 2,250,000 850,000 3.6% 2.9%
Non-herding 4,666,667 941,667 3.7% 2.1%
An average figure of maximal amounts that herding businesses borrowed from thee
banks is 2.250.000 MNT (500 thousand -5 million MNT) and average figure of minimal
amounts 850,000 MNT (300.0 thousand-3,0 million MNT). As opposed to the above
figure, soum based non herding businesses borrowed 4 666 667 MNT maximum
(Average of maximum loans) and 941,667 MNT minimum (Average of minimum loans).
As per two aimag center based businesses, they borrowed an average maximum of
20,0-80,0 million MNT and 3.0-12.0 million minimum. Many of the businesses borrow
from their friends and other individuals as it has 1) no interest sometimes and 2) flexible
pay back period.
Business plan is not always required for bank local funding, but 11 business operators
previously developed business plans to get loan funding under some projects. Of them
two received assistance from their friends and local government welfare officer.
All 6 business entities produce their financial reports; 3 have their own accountant and
other three produce reports with assistance from the local tax office and other
accounting professionals. Asked who would they refer to when they need assistance in
producing financial reports, one person would do it himself/herself, three would ask local