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Angel felting

Angel Felting, handcrafts, Mongolia (buyer)

Founded in 1999, Angel Felting is a small handcraft business based in Mongolia. Husband and wife, Dashdorj Erdenetulga and Byambajargal Munkhjargal set up the business by making woollen slippers at home. This idea came from a government initiative to empower Mongolian families to use traditional skills in producing craft products. 

Mongolia is dominated by the mining industry, which tends to attract a male workforce, offering a higher than average salary. However, the sector is precarious, and opportunities are limited. Angel Felting’s aim is to provide employment within their community and encourage people to create a safe and sustainable living outside of mining, using methods passed down through generations.

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EXTENDING OUR REACH THROUGH BUYER FINANCE

Update: Spring 2021

Although there were very few cases of Covid-19 in Mongolia, Angel Felting have provided their staff with a full PPE kit, including hand sanitiser, masks, face shields, and protective gowns. Due to restrictions with transport, they faced challenges exporting some of their goods. Despite this, they secured a large order with a buyer in the Netherlands and additional requests for slippers from buyers in Sweden and New Zealand. 

Co-founder Byambajargal Munkhjargal said: “The first Covid-19 case was diagnosed in Mongolia in mid-November, and sales completely stopped. Fortunately, we received reorders from our existing customers, produced them successfully and on time. They were shipped safely in November and December last year.” 

Angel Felting first met with Shared Interest at a trade fair in Frankfurt in 2019 and they became a customer the following year. The organisation was looking to develop their felt boots for outdoor use, and maintain a level of stock all year round. Byambajargal continued: “We produce felted home shoes for cold weather. It is a season-specific product so we have a good income during autumn and winter, but not spring and summer.” 

France said: “By extending production from nine months to twelve months a year, means that they can provide an income to their employees all year round and not only during peak season. In addition, they will be able to negotiate a better price if they can buy a large quantity of material in advance.”

Byambajargal continued: “Since founding the company, we had to stop production for two to three months during the low season. Now we can work throughout the year. We are planning to launch winter boots in March, and April 2021. We believe that we could have 100% stable production in the coming years. 

Angel Felting does not currently sell to buyers in the UK. Following a high level of interest in their products from members at our AGM, we will keep you updated on any plans to expand into the UK market.

EXPANDING OUR REACH WITH TECHNOLOGY

Update: Summer 2022

There is no doubt that Covid-19 severely hindered trade routes due to border closures and port restrictions, in addition to the longer-term effects of changing consumer buying patterns. However, as with most periods of disruption, it has also provided an opportunity to trial new ways of working, including the creative use of technology.

Virtual communication has become vital in enabling us to continue supporting buyer and producer organisations, especially in the case of due diligence. Pre-pandemic, this included in-person visits but following travel restrictions, we developed an online process. This meant that, while the majority of other social lenders decided to pause their lending to new customers, we continued to approve applications that met with agreed lending criteria, during the pandemic.

Shared Interest Head of Lending Paul Sablich said: “Due diligence helps us to verify the circumstances of an organisation that is
applying for finance. Before Covid-19, a member of our regional Lending Team would visit the premises and we needed to find an alternative way of fulfilling this part of the process. 

“We decided that, while travel restrictions remained in place, alongside our usual rigorous procedure of requesting references and the required financial documentation, we could also carry out video calls and information gathering with key members of the business, ranging from board members to farmers and artisans. This process also includes a virtual tour of the premises, along with equipment and infrastructure, so we can see all of the items we would expect to assess during an onsite visit, on screen.

“We had used some of these virtual methods in the past, which enabled us to approve the lending facility of a producer group despite their remote location in rural Mongolia.”

Shared Interest Business Development Manager France Villeneuve explains: “Angel Felting is a small handcraft business based in Mongolia, which produces felt slippers. They purchase raw wool directly from local shepherds, and produce felted shoes and boots. The finished goods are exported to The Netherlands, Sweden, France, Norway and New Zealand.”

Husband and wife, Dashdorj Erdenetulga and Byambajargal Munkhjargal set up the business by making woollen slippers at home. This idea came from a government initiative to encourage Mongolian families to use traditional skills in producing craft products.

Dashdorj said: “We started our activities as a home producer in 2000, producing contemporary slippers, by using an old traditional felt-making method.”

France continued: “Their producers are located in rural villages, and we would not have been able to carry out due diligence in person, even without pandemic restrictions. Instead, we carried out virtual tours and gathered the information required to approve their application.” 

Angel Felting became Shared Interest customers in August 2020. At this time, the government had closed its borders,
keeping the country isolated for two years. These measures were brought to an end in February 2022, and although
effective in containing Covid-19, the economy has suffered.

According to research carried out by Oxford University (Mongolia: After Successful Containment, Challenges Remain by Charles Krusekopf and Mendee Jargalsaikhan) “Mongolia was highly successful in containing Covid-19 and preventing community outbreaks. It worked closely and successfully with neighbouring countries and international organisations such as the World Health Organization to develop and implement public health measures and testing.

Moreover, Mongolia was one of the first countries to close its borders: This self-isolation, however, presents challenges
in maintaining economic functioning as the country is highly dependent on imports of many consumer products and exports of
natural resources.”

Dashdorj continued: “Shared Interest investors have helped us to withstand this difficult time. We have faced many
challenges over the years. We have a mission to develop our country, and establish fair life and social equality."

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