Microfinance and street childrenMicrofinance and street childrenMicrofinance and street childrenMicrofinance and street children
Is microfinance an appropriate tool to address the street children issue?
By Badreddine Serrokh,Solvay Business School (Free University of Brussels) ***June 2006
HERE ARE MILLIONS
of street children around theworld, floating and working here and there in thestreets of big metropolitan cities of the “South”. Witnessing the diversity characterizing such children andthe impossibility to define a “typical” street child, UNICEFtried to bring some light to the concept and proposed a binary terminology: the first category, termed “
children of the streets
”, live and work on the streets, 24h/24; thesecond category, labelled “
children on the streets
”, spendmost of their daytime there, before returning to theirfamilies at night. However, the concept of street childrenis an umbrella term, and operational definitions varywidely among countries.Beyond the complexity of finding an appropriatedefinition, the last 20 years demonstrated the intricateand harmful situations such children are facing. Highly vulnerable to hazardous working conditions,experiencing loneliness, medical problems, neglect andabuse, some governments and organisations started inrecent years to put jointly their effort in order to findeffective and sustainable solutions to the issue.This paper, mainly based on a field research of 45 daysamong street children of Bangladesh, is attempted toenrich the panel of solutions proposed, by focusing on anew intervention tool which revolutionized thedeveloping world: microfinance.Mainly based on the provision of credit and savingsservices to low-income people, microfinance is bringing hope to millions of poor households worldwide, who perceive access to financial services as an essentialcondition for getting away from the cycle of poverty inwhich they are trapped by giving them tools to taketheir own destiny on hand. Although considerable attention has been paid to adult people, little interest has been given to children, and a high research gap exists. Indeed, it is generally assumedthat, due to their young age, this population segmentdoes not need financial services; and, even if it might bethe case, providing them those services might createmore harm than good.Focusing on the particular segment of “street children”,this paper challenges these assumptions by structuringan analysis around two central questions:
1. What are the main demand drivers of streetchildren for financial services?2. How can we supply them those services in aneffective and sustainable way, in order toenhance street children’s well-being?
Our paper highlights a first requirement that needs to be considered before being able to answer those twocentral questions: the need to change our common beliefs about street children and child work. First,regarding street children, the common view perceivesthem as criminals, irresponsible, destitute and withoutany capacity, leading therefore to pity. Second, the verysensitive issue of child work has often been seen as adichotomy, where either the child does not work and istherefore well; either he does work and must be keptaway from any kind of work in order to be well.However, those two sets of beliefs seem to be toosimplistic regarding the complexity of the issue.
*** Thesis submitted in partial fulfilment for the degree of Management Engineer”, under the supervision of Dr. Daniel Traça,titular of the chair of sustainable human development at Solvay Business School, and the support of Pr. Marc Labie, from Warocqué School of Economics and Business in Mons-Hainaut, and Pr. Christian Platteau, from the Free University of Brussels and head of Proman Consulting