MONGOLIAN HERDERS NOW IN A CRISIS AS ANGORA/CASHMERE SWEATER DEMAND WANES WORLDWIDE-PROOF WE ARE ALL CONNECTED

We knew it, we saw it coming. Even the farthest corners of the world are now connected in our GLOBAL ECONOMY.

Mongolia, a remote and historic country whose territory is best known as having the Gobi Desert, is home to some 2.5 million people, the majority of whom earn their income by raising animals for profit to supply the rest of the world with that soft fiber from angora and cashmere goats and sheep.

The population has accepted the newest conspicuous consumption models of the rest of the world but on a more needy basis such as having solar panels for their tents to provide electricity for instance. Can you imagine solar power in Mongolia? I did not think of it there.

Mongolian herders too got over-extended in receiving loans from their banks for the purchase of larger herds, as as prices have fallen significantly for the animals and their cashmere, their banks have been demanding payment, so the herders must sell their animals in order to pay back the loans.

Surprisingly, banks have discovered that many herders submitted inaccurate information on their loan applications attesting to the number of animals that they used for collateral, and often then qualified for loans that were larger than the number of animals....what a shock, even in Mongolia we have sub-prime borrowers!

Now keep in mind that 2.7 million togrogs (their money) is about $1,900, and that the average herder loan is about 500,000 togrogs, about $350.

Everything is relative in an economy in which the families still eat the animals themselves after selling the cashmere and angora wool, and drink the milk and make by-products for the family meals.

Banks have actually started to compete for the business, with rates of 2%-3% a month.

The herders make money in two seasons; spring they sell the angora and cashmere, and in the fall they sell the skins and meat, so those are the times for loan repayments.

Our consumption of the high-end sweaters, scarves and clothing using the soft fibers has slowed, and guess what, we now have defaulting herders in Mongolia!

So if you though times were bad, think about the visit from the Mongolian repo-man who will repossess the animals who will no longer produce the soft fibers in the scarves you just "gotta-have".

It is a global market place, and we just have to be able to get along with everyone. The supply chain is longer than we realize.

One suggestion is to help budding entrepreneurs around the word, including Mongolia by making a KIVA loan. Your loan can be a small as $25, and when it is paid back you can loan it out again..

Visit www.KIVA.org to find out about this organization and pick who you want to lend the money to...the payback is quick and you will be helping with a micro loan to needy and entrepreneurial people all over the developing world, even Mongolian herders.

We Let You Loan to the Working Poor

Kiva's mission is to connect people through lending for the sake of alleviating poverty.

Kiva is the world's first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs around the globe.

The people you see on Kiva's site are real individuals in need of funding - not marketing material. When you browse entrepreneurs' profiles on the site, choose someone to lend to, and then make a loan, you are helping a real person make great strides towards economic independence and improve life for themselves, their family, and their community. Throughout the course of the loan (usually 6-12 months), you can receive email journal updates and track repayments. Then, when you get your loan money back, you can re-lend to someone else in need.

Kiva partners with existing expert microfinance institutions. In doing so, we gain access to outstanding entrepreneurs from impoverished communities world-wide. Our partners are experts in choosing qualified entrepreneurs. That said, they are usually short on funds. Through Kiva, our partners upload their entrepreneur profiles directly to the site so you can lend to them. When you do, not only do you get a unique experience connecting to a specific entrepreneur on the other side of the planet, but our microfinance partners can do more of what they do, more efficiently.

Kiva provides a data-rich, transparent lending platform. We are constantly working to make the system more transparent to show how money flows throughout the entire cycle, and what effect it has on the people and institutions lending it, borrowing it, and managing it along the way. To do this, we are using the power of the internet to facilitate one-to-one connections that were previously prohibitively expensive. Child sponsorship has always been a high overhead business. Kiva creates a similar interpersonal connection at much lower costs due to the instant, inexpensive nature of internet delivery. The individuals featured on our website are real people who need a loan and are waiting for socially-minded individuals like you to lend them money.