MICROCAPITAL.ORG STORY: Mongolia’s XacBank and Horus Noomadic Solutions Announce Launch of Mobile Banking Services for Microfinance

XacBank and Horus Noomadic Solutions, a mobile banking platform, has announced the launch of AMAR/mobile banking services for microfinance in Mongolia. AMAR is enabled by Noomadic. According to Noomadic, the launch of AMAR will enable XacBank’s clients to conduct cash-based transaction and payments by using their mobile phones through a network of agents and merchants. AMAR services can be used with all 4 mobile operators in Mongolia (G-Mobile, Mobicom, Skytel and Unitel) [1]. No additional information regarding how the network will function or its scope is provided.

According to Noomadic, the mobile banking platform will provide financial institutions the ability to offer a wide range of mobile banking services through any mobile phone provider using any type of mobile handset. The Noomadic platform is developed by Horus Normadic Solutions, a common subsidiary between Horus Development Finance (France) and Tenger Financial Group (Mongolia). Noomadic further added that XacBank’s clients can conduct cash-based transaction by using their mobile phones though a network of agents located in areas such as Petrovis gas stations and independent outlets. The platform was created in March 2008 and the company is based in Ulaanbaatar, Mongolia. Petrovis is a gas distribution network in Mongolia with more that 400 gas stations throughout the country [1]. No additional information is provided regarding Noomadic and its distribution network.

As mentioned earlier, Horus Nomadic Solutions (incorporated in Mongolia) is a joint-venture between Horus Development Finance (France) and Tenger Financial Group (Mongolia) incorporated in Mongolia [2]. Horus Development Finance specializes in institutional studies, operation and financial audits and the definition and implementation of management information systems, as well as offering training support for companies in all areas of finance and banking. The company advises a wide range of institutions and enterprises such as banks, governments (supervisory units for microfinance institutions, central banks) non-governmental organizations, microfinance institutions and international financial backers [3].

The foundation of TenGer Financial Group was originally named “Goviin Ehlel” established by Mercy Corps in 1999. TenGer Financial Group, former XAC-GE LLC, was established in 2001 as a result of merger between Goviin Ehlel Non-Bank Financial Institution (NBFI), a credit company created within the framework of USAID sponsored Gobi Regional Economic Development Project, and X.A.C. (Golden Fund for Development). The company’s mission is to contribute to the development of Mongolia by investing in economic entities and organization specialized in the financial sector [4].

Established in 1998, XacBank Mongolia is a provider of development finance in Mongolia, delivering products and inclusive services to regions of the country through a rural presence and a network of 67 branches. Its clientele represent not only the lower-income segment of the market – micro entrepreneurs – but also a growing number of small and medium sized enterprises [5]. As of 2008, the MixMarket reports XacBank’s total assets at USD 163 million, capital/asset (10.53 percent), debt to equity (8.50), deposits to loans (54.35 percent), deposits to total assets (39.55 percent) and gross loan portfolio to total assets (72.76 percent). Return on assets for the firm is at 1.86 percent with return on equity (18.69 percent). Financial revenue/assets for 2008 are reported at 19.29 percent. Profit Margin is at 12.33 percent [6].

MicroCapital earlier reported a paper wrap-up by CGAP that discusses the role of mobile operators in expanding access to finance. The brief assesses the capacity and incentives for mobile operators to provide financial services. The authors conclude that while mobile operators do not necessarily need to “own” the financial services associated with mobile banking, there are several options for mobile operators to participate in financial services delivery [7].

According to a recent MicroCapital report, a CGAP-GSMA Mobile Money Market Sizing Study found that the market for mobile financial services could increase to USD 5 billion by 2012. CGAP (Consultative Group to Assist the Poor) and the GSM Association (GSMA) published the results of a study estimating the size of the mobile financial market at the Mobile Money Summit in late June 2009 [7].

MicroCapital recently published details of the Mobile Money Summit 2009 that was held in Barcelona. Further details about the event can be found here and on our comprehensive event calendar [8].

By Zoran Stanisljevic

References:

[1] The Horus Groupe, http://www.horusgroupe.com/uploads/media/AmarbyNoomadic.pdf

[2] Noomadic website, http://www.noomadic.com/

[3] Horus Development Finance website, http://www.horus-df.com/

[4] Tengier Financial Group website, http://www.tengerfinancialgroup.mn/

[5] XacBank website, http://www.xacbank.mn/

[6] MixMarket XacBank, http://www.mixmarket.org/mfi/xacbank/data

[7] Microcapital Story, ‘CGAP (Consultative Group to Assist the Poor) and the GSM Association Release Mobile Money Market Sizing Study which Estimates Mobile Financial Services will Reach $5b in 2012’, https://www.microcapital.org/microcapital-story-consultative-group-to-assist-the-poor-cgap-and-the-groupe-speciale-mobile-association-gsma-release-mobile-money-market-sizing-study-which-estimates-mobile-financial-services-wi/

[8] Microfinance Event: ‘Mobile Money Summit 2009’, https://www.microcapital.org/microfinance-event-mobile-money-summit-2009-in-spain-hosted-by-consultative-group-to-assist-the-poor-cgap-department-for-international-development-dfid-international-finance-corporation-ifc/