At the heart of the concept of Children’s Development Bank is an institution that is owned by run by its members. This provides an opportunity to develop the personal skills of the children. The first step in our project was to create a mechanism whereby street and working children can save as this has several benefits. By providing them with a safe place to hold their money, it will encourage them to save for their future. By encouraging saving, it will encourage a sensible use of their money. Many street children waste their funds on drugs and other short-term fixes. The Bank made a rule by that no person on drugs could join; and this has led to a marked reduction in drug taking. An additional benefit is that savings are recycled into loans, and this makes the children much more careful in how they use the loans that they take out, as they know that it is their money, and the savings of their friends that is at risk.
The rules and constitution of the bank have been designed by the children. The rules cover criteria for membership, eligibility for loans, size of loans available, interest paid on savings and charged on loans, repayment terms and guarantees, etc. The bank is owned by and operated by its clients, in effect as a mutual association. About half the members of Children’s Development Bank wish to take out loans in order to develop micro-enterprise, but not all wish to do this immediately. Not all loans will be successful, and enterprises may fail, children may run off to another city, or unrelated factors such as ill health or a family crisis (for those in touch with their families) may occur. That the members of the bank take responsibility for dealing with such issues is an important part of the process.
The objective of the project
To provide savings and credit facilities to street and working children and to establish the concept of the Children’s Development Bank organized and operated by its members (the children) as a viable and sustainable activity.