Teaching Street Kids to Save Money in India

As a way to help the street children of India Rita Panicker founded Butterflies, a non-governmental organization back in 2001.  She believes that if children who can help themselves become more independent and self-supporting have a better sense of pride in themselves.  Some of the children had jobs from rag picking to sweeping floors, but they didn’t have the help to show them the way to save their money.  There are estimated around 10 million homeless children sleeping on the streets, under bridges, in parks, and shelters in India.  Most of them run away from home due to physical or sexual abuse in the home.  These kids usually work alone and are taken advantage of by the bosses they work for and also government officials and police take bribes from them.  Because of this abuse they tend to spend their money right away so that it won’t be taken from them.

Panicker came up with an idea to help these children since no one would lend them money because they don’t have addresses or official identity.  She helped them to start Bal Vikas Bank also known as the Children’s Development Bank (CBD).  In order to become a member, the children had to fill out an application.  After they filed they were then given an account number and passbook.  The children came up with the rules and decisions of the bank.  They were taught banking skills by local financial institutions.  There is a committee that is run by the children who makes all the decisions of whether the child can become a member of the bank.  They are required to make an initial deposit, with an interest earned of 3.5% and if they keep their money in the bank for over 11 months they get a bonus of 50% interest.

When they started this, they made decisions of who could have an account.  They didn’t want any drug dealers, alcoholics, pickpockets or gamblers, but they changed their minds after they figured out that most of them were under that list too.  Some of the children wanted to start a business and were given a chance to fill out an application for a business loan.  The committee would interview the applicant and then decide whether they could have the loan after the answers they would give has to how they would run their business and if they would able to repay.

Panicker was very pleased to find out that the children had very good banking, business skills and that they learned how to save and manage their own money.  The children were given credit for having skills, talent and responsibilities that many would not have given them credit for if Panicker had not started this institution for them to run and be a member of.