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WORLD SOCIAL FORUM: Delhi Youngsters Bank Way Out of Trouble

Teena Amrit Gill* - IPS/TerraViva

NEW DELHI, Jan 25 2005 (IPS) - Raju Kumar sits quietly in the corner of a cheerful bright room, across a child-friendly bank counter, updating accounts and ledger books. A bank manager since 15, he delicately balances his work with his studies.

In the room, which also backs up as a night shelter, a group of working children watches television.

A few slowly wander towards Raju and deposit their day’s savings with him. For many of these homeless street and working children, the Fatehpuri branch bank represents the hope that with savings they may one day be able to start a business, or acquire some technical skills, and get out of their situations of dire poverty.

”I feel good doing something for the children which is important for their lives,” explains Raju, a former rag picker. ”Since I read and write, I can help with this kind of work, and it is also good for my education.”

It’s voices like Raju’s that will be brought forth at the World Social Forum (WSF), which starts in Porto Alegre, Brazil on Jan. 26. One of the aims of the WSF is to give a voice to the world’s poor and excluded sectors, and hear of their success stories.

The WSF is an annual gathering of civil society representatives, held as a counterpoint to the World Economic Forum, which brings together the world’s political and business elite in the Swiss resort town of Davos every year.

The Bal Vikas Bank or Children’s Development Bank (CDB) was set up in April 2001 by Butterflies – a Delhi-based non-governmental organisation which has been working with street and working children since 1989.

Though the organisation ran a savings scheme for the children almost since its inception, in 2001, it was encouraged by an Indian funding agency – the National Foundation of India – with support from the Ford Foundation to initiate a pilot ‘youth bank’ project.

The CDB was set up with 200,000 rupees (4,570 U.S. dollars) as seed money provided by the international funding agency Comic Relief and works as a revolving fund where the savings generated are used to give more loans. In 2004, more than 24,000 rupees (550 U.S. dollars) had been deposited by children at the 12 ‘contact points’ across Delhi where Butterflies works.

”In a situation of extreme poverty, a bank like this is extremely relevant. The children are very interested in this scheme, especially because ownership – of both their money and the bank – lies with them. This is what is unique about the bank,” says Sebastian Mathew, India country coordinator of Butterflies.

The 1,300 children who are members of the bank set the rules for the CDB with minimum interference from other adults, says Sebastian. The loan committee that vets loans, for example, comprises nine children between the ages of 12 to 18 who are elected by the bank members. The bank manager and management committee are also elected.

At the Fatehpuri branch in Old Delhi, around 30 children save money regularly. These children work in tea stalls and ‘dhabhas’ (roadside eateries), as shoeshine boys, and as rag-pickers or vendors.

Of these 30 children, around 10 to 12 have taken loans to start businesses renting video cassettes or to buy pushcarts to hawk various goods like toys, wallets and other accessories.

Samreh, 13, stands on a busy road near the Old Delhi railway station, selling cheap plastic toys, combs, wallets and other items from a pushcart he brought with a loan from the Bal Vikas Bank or Children’s Development Bank.

Asked if he can pay the loan of 3,000 rupees (68.55 dollars) that he took out – after which he bought the cart from another boy for 500 rupees (11.42 dollars) – he says: ”I am confident I can. I earn around fifty to sixty rupees and within two months after taking the loan, I managed to return 300 rupees (of my loan).”

In fact, Samresh, who came to Delhi a year ago from Moradabad in Uttar Pradesh, says he wants to take out another loan to get more items to sell on his pushcart, such as socks, handkerchiefs and caps. ”I now work and continue with my studies,” he adds.

In order to be eligible for a loan, the children must save money regularly, and must have been a bank member for at least six months. Membership is open to youngsters aged between nine to 18.

It is estimated that there are some 400,000 street children in Delhi alone.

While the bank has undoubtedly helped children like Raju move toward a brighter future, the issue of whether microcredit can fundamentally address the problems street and working children face has been raised by development analysts and academics.

”Donors and advocates consistently over exaggerate the power of micro-enterprise credit and related assistance, while ignoring key structural issues that are far more pertinent to the long- term problem of … poverty i.e., agrarian reform, programmes favouring export production over subsistence crops, and trade agreements structured in the interests of transnational corporations,” says Nan Dawkins Scully of the Women’s Microcredit Accountability Network (WOMAN).

(*These stories are part of a special series commissioned from the IPS network by the TerraViva World Social Forum 2005 edition.)