MANILA, PHILIPPINES - A $2.5 million grant from the Asian Development Bank (ADB) will help Mongolia overhaul its savings and credit cooperative market and provide basic financial education nationwide, particularly for poor households.
The grant is from Japan's Fund for Poverty Reduction, financed by the Government of Japan and administered by ADB. The Financial Regulatory Commission is the executing agency for the project which will be carried out over 3 years.
"This support will help strengthen the regulation and supervision of savings and credit cooperatives. The project will also improve financial literacy in poor households through an innovative television drama series." said Betty Wilkinson, Senior Finance Specialist (Microfinance) in ADB's East Asia Department.
Mongolia is now passing a new law requiring savings and credit cooperatives to be licensed and regulated according to the latest international best practice. Following passage of the law, the grant will support the Financial Regulatory Commission to carry out on-site inspections and field reviews of savings and credit cooperative activities, provide training for staff, and introduce a comprehensive evaluation system for measuring results. The grant will help improve public understanding and confidence in the industry, which provides services in both urban and in rural areas.
To raise public understanding about basic finance, key messages about savings and managing money will be communicated through a six-part pilot drama series on Mongolian television. If the public response is positive, more episodes will be broadcast, with an accompanying phone text-in service that will incorporate small incentive payments for answers to financial questions. This will allow viewing rates, and the effectiveness of the messages, to be gauged.
"The Financial Regulatory Commission and the Ministry of Finance have agreed to continue to fund the television series if the programs have a positive impact on household financial literacy and behavior," said Ms. Wilkinson.