Setting up a savings and credit cooperative in Mongolia is a strategic move toward fostering community-driven financial empowerment. As a not-for-profit legal entity, a cooperative operates on the principles of common ownership, allowing members to unite and meet their shared economic, social, and cultural needs. By pooling resources, cooperatives improve members’ livelihoods while sharing risks and accessing valuable financial services.
Key Requirements for Establishment
In Mongolia, establishing a cooperative comes with distinct requirements based on its type:
- Ordinary Cooperatives: Must have at least 9 members.
- Savings and Credit Cooperatives: Require at least 20 members.
- Joint Cooperatives: Must be founded by 2 or more legal entities.
Obtaining a Special License for Savings and Credit Activities
Savings and credit cooperatives must apply for a special license from the Financial Regulatory Commission (FRC)after registering with the state’s legal entity register. This special license allows cooperatives to conduct deposit and credit operations and expand into various financial services, such as:
- Financial leasing services
- Project and program financing
- Electronic payment agent services
- Insurance agent activities
To obtain the special license, the cooperative must submit an application and supporting documents to the FRC. Within 45 working days, the FRC will decide on whether to grant the license.
Member Responsibilities and Legal Context
Members of savings and credit cooperatives are actively involved in decision-making processes, contributing capital, and adhering to the cooperative’s bylaws. The cooperative must comply with legal frameworks promoting transparency and good governance, ensuring that operations adhere to both national and international best practices.
The establishment of cooperatives in Mongolia is designed to enhance financial inclusion, improve livelihoods, and build resilient communities. By leveraging cooperative structures, members can access essential financial services, all while adhering to robust legal frameworks that promote accountability and transparency.
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