About XacBank Social and Environmental Responsibility

SOCIAL AND ENVIRONMENTAL MANAGEMENT POLICY

XacBank will further improve and enhance its social and environmental management system, including conducting a regular social and environmental performance audit on its operational impact. The Bank’s social and environmental policy will be guided by the principles of Corporate Social Responsibility, as a means of managing our business responsibly and sensitively for long-term success. We are committed to complying with national and international environmental regulations applicable to our operations and business services. The Bank will systematically gather data on social and environmental impacts from our operations across the country, and will provide its strategic shareholders and investors with environmental and social reports on a regular basis. The Bank will initiate in-house environmental protection measures aimed at efficient use of energy, fuel, water, reducing paper consumption and waste. We will seek to form business relations and alliances with partners, suppliers, and clients who follow similarly high social and environmental standards.

SOCIALLY ORIENTED AND ENVIRONMENTALLY RESPONSIBLE ACTIVITIES

Access to financial services in soums (rural county) continued through both the local community based Franchised Savings and Credit Cooperatives (SCCs) and the Bank’s rural mobile banking services. By reaching to the half of the Mongolian population, we contribute our share to local development. The Bank continued the policy to withdraw from direct lending through rural mobile banking service in the soums via the transfer of existing loan portfolios to SCCs. As a result, seven thousand members have access to financial services through 75 franchisee SCCs in the soums. XacBank’s new environmental responsibility initiative is gaining traction both inside and outside the Bank: and business partners support it. The Franchised SCCs, ‘Zoos-Hurd’ in Umnudelger soum in Hentiy aymag, ‘Naran-Urgah’ in Bayandun soum in Dornod aymag, are encouraging local people to protect the natural environment by cleaning and restoring clean water sources, as well as producing and distributing hand-made cotton bags.

With XacBank’s donation of total MNT11.0 million granted to the Labor and Training Factory of Blind citizens, the sewing unit has been established and sewing trainings provided. This collaboration created 10 new jobs for blind and other disabled people. New tailoring equipment is purchased and installed to produce various logos which are to be printed on the cotton bags. The Bank’s individual clients have been attracted to the idea of producing cotton bags, which not only raises environmental awareness of fellow citizens but also is becoming an important source of family revenue.

In support of low-income women in remote areas, the Bank initiated jointly with the EBRD and Mongolian Women Federation, a group lending program. For this purpose a research study has been conducted since 2007. Under this project woman groups in Arhangay, Bulgan, Hentyi and Huvsgul aymags received low-interest loans without collateral. Group members are required to have a group saving or common asset. In 2008, MNT163.5 million was disbursed to 321 low-income women.

X.A.C (Mongolian abbreviation for Golden Fund for Development) NGO, in partnership with Lek En Linge High School of Netherlands, commenced the implementation of a 55,000 Euro aid project for High School number 88 in the Bayanzurkh district. The project provided financial support for classroom repairs, the purchase of training materials, the provision of a variety of training opportunities for students and teaching staff, sports and cultural equipment, university scholarships, extra-curricular activities and sponsorship for the national high school football tournament “Duulian- 2020.” The Dutch high school sends over 100 students on the Trans-Siberian railway once every two years.

A partnership between XacBank and the “Together Against Poverty” foundation resulted in the organization of the TV reality show “Life is always good.” The show was made in cooperation with Mongolian National Chamber of Commerce and Industry and Education with the aim of supporting entrepreneurs and increasing employment. During the “Micro-finance Days” organized in Ulaanbaatar city, XacBank donated a ger dwelling to a poor family. XacBank also donated two sets of ger dwellings to poor families within the “Warm Spirit” campaign run by NTV channel. 108 trees were planted and cared for along the draining Selbe river near the Shargamorit area under the initiative of X.A.C NGO members.