Microfinance and street children: is microfinance an appropriate tool to address the street children issue ?

4.3. Why do street children need savings?

Our data tend to show that street children, as any other people in the world, need savings in order to meet their future financial needs, which are of 3 kinds (following Rutherford's typology):

· Life-cycle, such as supporting their family or getting education

· Emergencies, in order to be able to meet their own as well as their families' emergency costs

· Opportunities, in order to invest it (either directly, or either through the loan they can get thanks to their savings)

Those are the three pillars of their savings needs. However, what makes particular a street child from another person is its street life insecurity, which is the root of their needs for savings. Let us therefore discuss quickly this argument, before moving on to the three pillars.

4.3.1. The street life insecurity

Street Children of all ages and categories have reported how the street is an unsafe environment. Passing most of their time there, their money was often stolen, especially when sleeping on the streets. They reported that, usually, other street children were stealing money from them. Moreover, another source of fear and theft was the «Mastaans» (see Box) who threat them in order to get money.

Box 2.1. : The world of Mastaans - Dhaka Underworld

«A number of the mastaans have good relationships with the political parties (both ruling and opposition parties). In some areas mastaans collaborate with each other, whereas in other areas they fight over territory.

Mastaans use children for a number of illegal activities, such as carrying drugs, small arms or throwing bombs. Mastaans target and identify street children from street to work for them. For targeted children escaping from the claws of the mastaan is by nature almost impossible and children who try to escape are usually killed. People are aware of the activities of mastaans. At the same time people are scared to talk about mastaans. Children are paid according to activities performed, and payment is related to trust between the mastaan and the child, scale of illegality, skills and experience».

( from Iglebaeck and Hassan, 2005)

Consequently, they look for ways to keep their money safe and were doing so by using three strategies (before joining Padakhep and benefiting from access to savings services): short-term devices, informal intermediaries and «the quick spending'.

A. Short-term devices: Street children find innovative ways to store their money, such as trousers, shoes, etc. They indicated the usefulness of such strategies for very short-term period, as money is quickly accessible. However, it is inappropriate because it can get wet when it rains, or can be lost if they change clothes; and it is unsafe, as other children know that they keep money with them and may attack them. Mohamed Kawsar explains us this danger.

Mohammed Kawsar is a 10 years old boy. He is living alone in Dhaka city and left his village in order to help financially his family. He is working in a vegetable market and gets 20 to 30 Tk daily. In order to protect his money, he used to hide it in his pocket. However, one time, as he was sleeping on the street, somebody came, cut his pocket and stole all his earnings. Since then, Mohammed Kawssar deposits his money in Padakhep.

Fig. 2.1: a picture taken during one of our FGD showing a «category 1» street child who stores money in his shirt

Money stored in a short-term device

B. Informal financial intermediaries: such as mud banks, money guards or bamboos^43(*), etc. Children expressed two critics regarding those intermediaries.

First is the relative low access they have, due to their status of «destitute» among the Bangladeshi society. Street children have highlighted that many do not want to accept their money, because they are considered as theft and criminals and want to avoid problems. Iglebaeck and Hassan (2005) explain that one reason might be the low access to «private spheres» that urban poor children in Bangladesh have, in comparison to their rural counterparts.

Second is the lack of safety of those intermediaries; indeed, many children pointed out their fears regarding those providers who were usually disappearing with the money of their «customers» after some time.

«One time, one man left with 500,000 Taka and all people in the slum were very sad» (Rafik)

Moreover, even if those providers do not disappear, they may not want to give them back their money because they know that nobody will pursue them if they do so. The police is, indeed, far to protect street children and even if they tell the police that they have stored their money with a particular person, the police would not believe them.

C. Quick spending

The last available strategy that street children have is to spend their earnings quickly, before loosing it. Al Amin quotation summarizes their strategy:

«If we don't have a place where to deposit our money, we know other street children will steal it from us. So, it's better to spend it quickly, before loosing it! «(Al Amin - 13 years old)

Another child pointed out the same behaviour:

«When we have a lot of money on us, we spend it quickly, buying lot of Pulao Byriani (i.e. bangali food made of rice), ice cream, video games and going to the cinema.»

Consequently, street children may be trapped into a vicious cycle. Indeed, because of their vulnerability, they will be pushed to misuse their money; because of this, they will not be able to meet their expenditures, enhancing therefore their vulnerability. In such a circle, the children, from being the victim of robbery, can become the author of it, as they will not have enough money to meet their expenditures. Stealing becomes therefore an habit, and sooner or later, negatively impacts the child.

* ⁴³ These are informal systems available to poor people who can save money there. «Mudbanks» are generally insecure as it can be stolen and it is difficult to withdraw small amounts of money. «Bamboo» are relatively similar, but less available in urban areas than mudbanks.