From Development Challenges to Business Models:Young Social Entrepreneurs Changing Lives in MongoliaNov 2, 2017
Ulziitogtokh Sodnomsenge – or Ulzii, as he is known – is not a typical businessman. After working in Korea, he returned to Mongolia and decided to rescue an abandoned lake in one of Ulaanbaatar’s ger districts. “There was a little water at the bottom from the rain, along with weeds and trash,” he recounted in an interview with UNDP.
“An elderly woman sitting nearby told me it used to be full of water. I wanted to restore it.”
In 2009, Ulzii gained approval to develop the Nogoon Nuur (Green Lake) at Denjin Myanga. He then cleaned up the lake and used his savings to turn the former dumpsite into an affordable community space.In December 2012 it finally opened, offering affordable ice-skating for children in the community at just 1,000 MNT (approximately 40 US cents) per child. “It was brimming with children,” he recalled smiling. “Every winter, it’s almost overflowing.”In summer, it becomes a paddle boating center, with 5,000-6,000 visits from children every season.
“The kids in this area often have a very hard life. I want to give them somewhere to play.”
Social entrepreneurship – such as the Green Lake venture – refers to entities with social or environmental causes at their core. Like any business, social enterprises aim to profit, to sustain their founders, pay their staff and shareholders. However, much of their profits also go to causes that address development challenges.The concept is catching on in Mongolia. Mongolia’s first Social Entrepreneurship Bootcamp was held in October, to inspire social entrepreneurs further, organised by Educated Initiatives and the Zorig Foundation. Over the three-day event, eight teams worked on business solutions to a range of issues, including recycling, waste management and digital education, before pitching their plans to a panel of judges.
“The bootcamp was really eye-opening experience for me,” said Mand Batdorj who won first place for the recycled baby products brand (R’s are Us) created with her team mate, Nomin Nora.
“I’ve learnt how to create value using entrepreneurial skills for a social problems and helping people to lead a better life.”
A Facebook group “Social Entrepreneurs in Mongolia” was also created by bootcamp participants, to connect Social Entrepreneurs in Mongolia and allow them to share their experiences. Social entrepreneurs will play a vital role in meeting the Sustainable Development Goals for 2030, including an end to poverty, reduced inequality and protecting the planet. “At the core of that business model is the idea to do good, and address a social or environmental issue,” said UNDP Resident Representative, Beate Trankmann, speaking at Mongolia’s first Social Entrepreneurship Summit (SES) in Ulaanbaatar earlier this year.
Initiated by Development Solutions, the event drew more than 200 people, including entrepreneurs, officials, business leaders, international organizations, banks and other stakeholders.
“Social entrepreneurs can also create social and environmental value, by using sustainably and ethically sourced materials at every stage of the production or value chain,” she added.
“They can create jobs for disadvantaged groups and pay a living wage, rather than a minimum wage,” Trankmann said.
Fair trade craft business, Mary and Martha, set up in Ulaanbaatar in 2007 by Bill and Irene Manley is one such example, supporting small local producers. It has been a member of the World Fair Trade Organization (WFTO) since 2011.
“We believe that we should show ethical, fair and transparent businesses can compete head to head with main stream businesses, without major donations and without running at a loss,” according to a statement on their website.
“We…provide up to 50% advances on orders and often give long term advances, so that materials can be bought when available,” it adds.
Global Social Entrepreneurship Network consultant, Peter Ptashko, is working to encourage other social entrepreneurs in Mongolia and globally.
“We provide a small amount of funding and support for people to be able to grow an early stage business,” he said.“We also build an ecosystem around them – the right kind of training opportunities, the right kind of policy support and environment.”
GSEN has worked with around 800,000 people globally, creating more than 5,000 jobs in social enterprises. It now collaborates with Youth Business Mongolia, teaching them how to support Mongolia’s social entrepreneurs. According to UN estimates, about two thirds of the funding, technology and expertise needed to achieve the SDGs agreed by world leaders in 2015 must come from the private sector. Globally, there is a growing trend towards responsible business models that go beyond corporate social responsibility and philanthropy.
For Khulan Davaadorj, Founder and CEO of Natural Essentials LLC, which established Mongolia’s first organic skincare brand, Lhamour, sustainability is a core focus.
“We produce zero waste. Every raw material becomes an end product,” said Davaadorj in a recent interview. The brand uses recycled paper and no plastic bags, earning it the ‘Most Responsible SME in Asia’ award in 2016 by the MORS Research Institute in Singapore. Lhamour is also now available overseas and listed on the Social Enablers SE100 platform.
“Even though we didn’t make any profit yet, our attention is on sustainability, on the environment and on giving back to society,” Davaadorj added. This includes giving free dental checkups to children in ger districts and teaching them how to use soap, she added. Davaadorj recently travelled to the United States as part of Fortune State Department Women’s Mentoring Partnership in Washington D.C. She also mentors other entrepreneurs in Mongolia.
This is a crucial part of growing social entrepreneurship further in the country, said YBM Mentoring Manager, Bolortsetseg Gelegjamts.
“Since 2013, we have been working towards localizing mentoring activities, explaining why mentoring matters, what mentoring is, training mentees and increasing their participation.” With more training and mentoring, Mongolia’s social entrepreneurs now have more support and role models. However, greater awareness and support is needed for them to grow.
“I am too scared to take out another bank loan to grow the project,” said Ulzii, who has recently repaid his last bank loan. “The interest rates are just too high.”
Mongolia’s central bank hiked interest rates to 15 percent last year, in an effort to protect the country’s currency amid an economic crisis.“It took all my strength to reach this point. I can’t grow any further on my own.” If more funding were available Ulzii added, he would like to develop Green Lake with educational workshops at its indoor classroom. He also hopes to help others expand community spaces in Mongolia, on a volunteer basis. Mongolia’s entrepreneurs are taking the initiative to improve the lives of their fellow citizens. More support is needed from all stakeholders – including the government, banks, bigger businesses, civil society and the media – for Mongolia’s social entrepreneurs to be greater agents of change in future.
UNDP Communications Team