Banking for a better future

DEVELOPMENT: A bank run exclusively by children sets an example for a new economic movement.

A night shelter set up by the Municipal Corporation of Delhi (MCD) becomes a buzzing hive of commerce at 6 pm every day. The doors of Children's Development Bank "" India's only bank chain run by children "" are open for business.

By day, the premises serve as school that also serves mid day meals to children. But as the day comes to close, the child-adults swagger in. These are rag pickers and daily wagers engaged in menial labour "" washing utensils at weddings, for instance.

Very professionally, these children deposit their earnings, withdraw money and seek advances. For many, the bank has changed their lives. Sudesh, who came to Delhi five years ago from West Bengal, used to make both ends meet by either washing utensils at parties or rag picking.

"I used to earn around Rs 25-30 a day rag-picking. During the wedding season, I would earn between Rs 80-90 a day, washing utensils at parties," he said.

But, things started to change for him after he became a member of the CDB, facilitated by Delhi-based NGO Butterflies.

Now, relieved of his role as child volunteer manager, Sudesh says, "The bank opens in the evening because that's the time when the children get time after finishing their chores. We operate both savings and the current accounts at our bank. I used to handle current account," he said. Sudesh is now using the money he saved for his studies.

"The CDB initiative makes the children feel confident as it inculcates the habit of saving in them. Also, since the bank is managed and controlled by the children themselves, it has become a tool for skill education," said Sebastian Mathew, India Country Co-ordinator, CDB.

Like any other bank, the CDB also disburses advances to the children. "The children use the advances for setting up small businesses. The money has been invested in starting tea stalls, selling vegetables, hosiery items and fruits and vegetable co-operatives. So, the whole idea is to make the children self-sufficient so they can live their life with integrity," Mathew added.

Not that it is all that easy. One has to go through strict procedure before procuring advances from the bank.

"We see membership details. One has to be a member of the bank for at least six months before being eligible to procure advances. Two children have to be guarantors. Also, the child has to furnish details regarding what he plans to do with the money. The age for procuring an advance is between 15 and 18," said Morepal, a rag-picker, who handles the savings account at the bank in the evening.

"CDB has disbursed Rs 86,000 as advances in Delhi from 2001 till date. Of this, we have recovered only about Rs 30,000. The all-India disbursal between 2004 and 2007 was around Rs 4 lakh. Of this, we have recovered Rs 2,25,000 till date," said Mathew. That's a creditable account!