Childrens' bank turns street children into entrepreneurs

The UN estimates that 500 million people around the world are homeless, and UNICEF estimates India alone has 11 million homeless children. Most street children suffer from malnutrition, hunger, health problems, and abuse. They make ends meet by working various jobs or by stealing. They have dreams, but no way to save for the future.

The Children’s Development Bank in India seeks to turn these children into the next generation of entrepreneurs. The bank works on banking and co-operative principles, where savers are members and joint owners of the bank. Any child can save money with the bank and earn interest, as well as take out loans if they are over 15 years old. The bank is managed jointly by children and adults, and members share in the interest earned by the bank.

The bank, inspired by the Youth Bank in the UK, has branches in India, Afghanistan, and Sri Lanka. “One of the biggest problems facing these children was that they did not have a safe place to keep their hard-earned money,” says Rita Panicker, who helped set up the bank in 2001. “In fact, it was the children who came up with the idea of the children’s bank. It started with 20 members in 2001 – and now it has 1,300 members in Delhi.”

The children have a say in how the bank is run and on what conditions it should lend money. A key part of the bank’s mandate is helping the children build entrepreneurial skills for business. Mentors help the children choose a business model, select an occupation with minimal risk and more benefits, get training and solve business problems.

Ten-year-old Deepak Prahlad, a street child in Delhi, where the bank has 1,300 members, dreams of being a doctor. “I know what it takes to be a doctor. I need to study hard and need to save a lot of money,” he told the Hindustan Times. He works as a rag picker and has started saving 30 to 40 rupees a day in the bank, which pays 3.5% interest on savings accounts.

Sudesh, a 15-year-old manager who looks after the bank’s current accounts, said: “We are extremely careful about whom to offer loans since we do not want to see our members’ savings lost because of bad loans. The skills I have learnt here are going to stand me in good stead in life.” Managers are chosen every six months by the children and they compete for the job.

This story is told in Development Challenges, South-South Solutions, the November 2007 e-newletter of the Special Unit for South-South Co-operation in UNDP.

 

For other stories about homelessness and the homeless, see:

Canadian website brings gifts to city's homeless

Young girl's Ladybug Foundation brings hope, support to Canada's homeless

Shining shoes in London offers escape from homelessness

Homeless World Cup changes lives, attitudes about homelessness

Volunteers build home for South African AIDS orphan family

Women 'light the dark' for their families and communities


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