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

4.3.2. Life-cycle needs:

Street children, although their street life hardship, pointed out how they need savings in order to meet their life-cycle needs. Those needs refer to the predictable events that hit the children (adapted from Rutherford, 1999), and can be classified in three categories:

1. Support family,

2. Get education and

3. Other

1. Support family

Providing financial support to the family came as one of the most important expenditure in the street children's budget and was significant in terms of financial pressure and frequency.

Although expressed by children of all categories and ages, their financial behaviours in terms of family support were different.

In order to capture this diversity, we can categorize the children into 2 different sets, based on their physical proximity with their families:

#177; Set 1: category 1 & 3

This first set contains children who live far from their families (i.e. parents). Both categories have, in most cases, their families staying in villages, the main difference being that Category 1 street children have no relatives (uncle, aunt, etc) to live with in Dhaka city.

Category 1: who work and live on the street day and night without their family

They appeared to support (or not) their family in a different way, depending on the reason(s) that made them leave their villages. Here, we can underscore 3 profiles of children:

§ Children who left their families for economic reasons:

They left (or had to leave) in order to help financially their families staying at the home village. Their support was very high and children were finding very innovative ways to send money to their families.

The money transfer was done through different strategies.

The first consisted of a direct transfer where the child went to the village, directly, and gave the money to his/her parents. It was usually done 2 or 3 times a year (for special occasions).

The second strategy was to use an intermediary and to transfer the money through a trustworthy person.

§ Children who left their families for non-economic reasons and did not face any abuse

They left generally in order to seek autonomy and `independence', as the urban life fascinates them. However, many acknowledged the role they need to play in the family's life and tried to help it financially whenever they can. This support was either in cash or in kind, sending therefore money or some gifts to their brothers/sisters/cousins staying in the villages.

§ Children who left their families for non-economic reasons and did face abuse/harassment

They completely cut contact with their families, and no support of any kind is given to them.

All those children, except the last category, highlighted how access to savings was needed in order to cope with these expenditures, and that having no access to savings would mean that no support to family would be possible.

Category 3: who work on the street during the day and return to their relatives by night

Although not living with their own families, those children bear a double «burden»: first, many tell they support their families generally living in their villages; second, they were expressing how they were contributing (or had to contribute^44(*)) to their relatives in Dhaka city (i.e. aunt, uncle, grandmother-father, etc). This is the case of Munna, a young boy living in Dhaka:

Munna is 16 years old. Living with his grand mother, he is working in a «Shai Doccan» (i.e. tea stall) every day. This job gives him at the end of the day 40 to 50 TK). Munna left his parents in the village some years ago because of poverty. So, as he feels responsible towards them, he sends every month some amount of money. But it is not the only expenditure he has to afford. Living with his uncle, he needs to give him 100 TK every month (1, 50 Euros), and to bear daily family costs. To do so, Munna spends a big part of his daily income, but saves some money in Padakhep in order to be able to give the monthly «rent» and to meet any emergency which may occur to his uncle's family, or to his close family in the village. This hardship of life does not prevent Munna from dreaming to become a big business man in the future...

In order to afford these expenditures, they need to manage their money. From their earnings, children were giving a part to their relatives in Dhaka. Another small part was used for their own tiny spendings The third part which remains was put in a savings account in order to send to their parents in the village. So, here, street children expressed the need to have access to savings in order to be able to send some money to their families, otherwise «our relatives will take all our money».

#177; Set 2: category 2 and 4

This second set of children lives far from their parents, who are generally settled in their villages.

Category 2 - Who work and live on the street day and night with their family (pavements)

They appeared to support their parents on a permanent basis, a large part of their income being given to them in order to support their basic needs, and the needs of their siblings.

They are using their income to cope with their family needs. For this category, therefore, the interest of financial services was not directly expressed as a mean to meet this financial need, as they are mainly using their income to do so. However, as pointed by so many children, savings facilities were a mean for them to meet this expenditure without neglecting themselves. Indeed, as the major part of their income was going to their family, they were keeping one part of it which they were depositing on their savings account. The purpose expressed is to build a better future. In fact, if no savings facilities were made available to them, they would have hardly been able to think about themselves, as the family pressure and the misuse propensity would have been too big to keep some money in their pockets.

Category 4: Who work on the street during the day and return to their family at night

Those children were generally working with their parents. They were therefore also supporting their families on a permanent basis, but more with their «working force» (as usually do rural children).

Therefore, they were not giving cash to their parents, but the opposite was sometimes happening: parents were giving some «pocket money» to the children, but rarely a regular salary, and used to urging them to save money.

Finally, we must note that this reflects the general trend and that some children from category 4 highlighted that they give money to their parents on a permanent basis, as they are not working (disabilities, etc)

However, apart from this support, a significant part of their savings amount is said to be used in order to help their families in case of an emergency (when a brother/sister/mother/father is sick). Surprisingly, many of the children interviewed expressed that their parents were urging them to save (especially the younger ones, from 8 to 12 years old). Usually, the money deposited in their savings account was the one received from their parents, as a «reward» for the help they have furnished to the family's business. So, we can draw from this behaviour a vicious circle, where children are paid for their job, but urged to put all the money in their savings account, money which will be returned after to the family. Therefore, the child appears here as a mean for adult members to access savings facilities. However, many SC expressed how they were using the money they were saving for themselves and how the «pressure» practiced by the parents was a lot of time beneficial. (as the girl who is saving because her mother urged her to do so for her marriage, etc).

2. Get education

Street children did not consider work and education as mutually exclusive. Indeed, many children pointed out how savings was needed in order to pay for their school fees or the school fees of their siblings. Even if children were getting non formal education at the drop-in-centre, some of them re-entered the formal education system. However, it was mainly the case better off street children (i.e. category 4), but some other children did also express the same concern.

This was the case of AL AMIN, a child of 13 years old who is struggling to become a doctor. Alone in the streets of Dhaka, his father being dead and his mother living in the home village, he is allocating a large part of his income in buying school furniture and in paying his school fees. To do so, he works as a Minti and, when he finishes his work, goes to the school.

3. Others

Some children expressed the need to get access to savings in order to pay their loans instalments or to payback the loan instalments of their parents.

«I took a credit of 500Tk from Padakhep in order to buy chocolate and to sell it. I had a daily profit of 50-60Tk and saved all my profits at Padakhep. Thanks to these savings, I was able to repay my loan»

Other children were saving in order to meet their own future occasional expenditures, as buying a new dress for girls in special occasions (e.g. Eid festival), or to go to the cinema. Other expenditures were expressed, some of them being a bit «dark».

* ⁴⁴ Some children were forced to support financially their relatives in Dhaka city