Gobi Finance CEO on Digital Lending, Mobile-Based Innovation, and Supporting Women in Business

Gobi Finance CEO on Digital Lending, Mobile-Based Innovation, and Supporting Women in Business

Established in 2012, Gobi Finance NBFI is a Mongolia-based finance institution with a focus on micro/SME and consumer financing. It is fully licensed by the Financial Regulatory Commission of Mongolia and offers traditional as well as mobile lending services to its clients. It won three accolades at the 2023 Global Banking & Finance Awards, including Best SME Finance Company – Mongolia. Wanda Rich, editor of Global Banking & Finance Review, recently spoke with Gobi Finance CEO Mrs. Zulaa Ganbat to learn more about the organisation and some of the initiatives behind its award-winning success.

“Our country is landlocked and strategically located between two economic giants, China and Russia, and offers vast untapped natural resources. With a fast-growing economy fuelled by the mining sector, there is an unmet demand for micro and SME finance that is not fully served by the local institutions,” she began. “Thus, Gobi Finance has been working to fill this gap and contribute to the establishment and expansion of a well-managed SME industry and consumer lending segment in this country. In addition, Gobi Finance is managed by a team of senior Mongolian and international professionals who bring investment and operational management experience from not only Mongolia, but also global financial institutions.”

Innovation, particularly in terms of digitalisation, has played a key role in the firm’s progress. “Our growth and success are made possible by our team’s dedication to providing financial services with innovation,” Zulaa said. “At Gobi Finance, we have a team of people who have studied and worked abroad, and we have our own in-house IT team.

“The Mongolian microfinance industry has experienced rapid advancement in terms of digital lending in the last few years. Gobi Finance was one of the early adopters of digital lending, and with our in-house team, we have been able to grow and provide our services to an increasing number of customers. Currently, we offer mobile-based lending and savings services to customers, and we are working to introduce money remittance and trading services.”

She also confirmed that Gobi Finance is the only microfinance institution in the country to have successfully received long-term financing from the US development institution, the Development Finance Corporation (DFC). “This financing was a demonstration of our company’s prudent management and financial standing, and also allowed us to generate growth in times of rapid changes.”

She went on to explain how the SME sector is one of the most important drivers for the Mongolian economy, accounting for 50 percent of employment and making up two-thirds of the total registered enterprises in the country. “The biggest challenge faced by micro and SME businesses is the lack of financing opportunities available in this country,” she said. “Gobi Finance is one of numerous microfinance institutions that continue to serve SMEs, but we cannot meet the ever-growing demand generated by the rapid economic growth. The local capital market is in its early stages and is not equipped to serve the industry’s needs. Moreover, the foreign direct investment into the country fluctuates with the commodity market. As a result, we continue to seek foreign funding opportunities to serve the increasing demand at home.”

One of Gobi Finance’s areas of focus is opening up financial opportunities for women and supporting their growth in business, an ethos that earned another honour at the 2023 Global Banking & Finance Awards for Mongolia’s Best Financial Institution for Empowering Women in Business. Zulaa described how this approach came to be.

“Mongolia is ranked as a country with advanced gender development, and women account for a high share of employment and business,” she said. “64 percent of SMEs are women-owned, and often they are underserved by the local financial institutions. Naturally, the majority of Gobi Finance customers are SMEs that are either owned or run by women. We believe they choose to work with Gobi because we provide reliable information about financing terms and facilitate loans swiftly. Also, the financing by the DFC highlights Gobi Finance’s developmental impact on Mongolia by supporting local micro and SME businesses.”

When it comes to financing, the advice Zulaa offers to businesses and consumers centres around access to the right tools and thorough research to find the terms that suit them best. “Access to finance is a persistent challenge, but also, SMEs need access to know-how, networks and skills to succeed,” she asserted. “We advise our customers to plan ahead and shop around for the best terms. In practice, loans provided by local institutions tend to be short-term and expensive, and require extensive collateral pledges. Thus, planning ahead and making sure to get the best terms available for interest rate, duration and collateral value are important.”

Gobi Finance’s third win at the 2023 Global Banking & Finance Awards came for Mongolia’s Best Fintech App, which was awarded for CashOne, its mobile-based lending platform. “We introduced CashOne in 2019, and it is one of the first of its kind,” Zulaa reported. “Since personal credit cards are not widely used, mobile-based lending has been an instant hit because it does not require collateral, and loans can be issued in a few minutes.

“CashOne is a fully integrated platform that includes a core system, credit scoring, and a banking gateway. The platform combines traditional and behavioural digital footprints to calculate innovative credit scores. Through CashOne, we now provide mobile consumer lending and savings products, and we will launch international money remittance and securities trading services. Ultimately, CashOne aims to solve personal finance with a one-stop super-application.”

All of the aforementioned services and initiatives are supported by Gobi Finance’s client services team, which provides its customers with financing information and periodic monitoring courtesy of its dedication to ongoing training and development. “In order to ensure the best customer experience, we continuously provide training to our team with local and international training centres and courses,” Zulaa said. “These courses range from anti-money laundering to training for micro and SME financial service providers. Thanks to the EBRD in Mongolia, microfinance companies like Gobi Finance can freely participate in digital and classroom training provided by the Regional Small Business Programme, which provides know-how in the field of microfinance and best practices in providing financial services in Mongolia.”

Zulaa concluded by reaffirming Gobi Finance’s commitment to maintaining its support of Mongolia’s financial development. “Mongolia is a developing country, and we will see steady growth in the financial sector. Gobi Finance is working to be a part of the driving force that elevates SME and consumer lending based on our experience and dedication to financial innovation.”