Banking for working children

Poor people always believe in having cash in hand. They are fond of pocket accounting.  What cash they have in their pocket is often how they manage their money. They do not like bank accounts because having a bank account, to them, is hassling with journeys and documents.

Having a bank account requires pay-in-slips to deposit and cheques to withdraw money, which is the stepping-stone of the basic financial management. A bank account helps keep your money safe from loss or theft and maintain records of your financial transactions. Saving money, or the saving habit, is the foundation of all financial successes. This is an old lesson about banking known only to those who have homes.

To tell the home truths about banking to the homeless children who are about to go astray, Bangladesh Bank has taken a laudable step to bring the thrown-away children under banking coverage.

There are not many people around us who feel their hearts wrenching in pain at the sight of homeless children picking morsels of leftover food from garbage bins on the streets of Dhaka. Street children, more known as 'tokais', who roam around are used by the politicians to chant slogans for them in meetings and processions or for throwing molotov cocktails during political strikes. About half a million working children are wasting away from strenuous labour in the dark sheds of factories, or hanging on to the handrails of buses and trucks as shouting helpers. They are small cogs of many large machines.

Who could empathise with those kids languishing away? Yes, it was Dr Atiur Rahman, governor, Bangladesh Bank, who could realise that these aimless children's future is hung in the balance; they need to be salvaged and given a chance to save a bit of money out of their petty earnings.

A man who had witnessed and experienced poverty in his childhood at a village in the district of Jamalpur, Dr Atiur is one of those few who always look around at the ways the poor in our society eke out their living and has been often seen to apply whatever means he has at his disposal as a central banker in alleviating their sufferings. Many poverty-alleviating banking schemes undertaken in the country are his brainchildren.

Bangladesh has already proven that it can make possible what apparently seems impossible. The poor of the world are today inspired to learn how a bank could alleviate poverty in Bangladesh, thanks to Professor Muhammad Yunus, the 'Banker for the Poor', who has lighted fires in the minds of the reformers bent on launching crusades against global poverty. His famous quotation is nowadays read aloud in many school rooms around the world: "One day our grandchildren will go to museums to see what poverty was like".

Banks in Bangladesh are now set to open bank accounts for street and working children, as initiated and instructed by Bangladesh Bank, the central bank. On Saturday (May 31, 2014), about 300 street children embarked on a new 'journey to building wealth' during a function presided over by Bangladesh Bank Governor Dr Atiur Rahman to mark the opening of the initiative of bringing the street children under banking coverage. The initiative is aimed at offering banking facility to the destitute children who have no option than to live and work in railway stations, slums, footpaths, bus stations and ferry terminals. The main goal is to develop savings habits in the young minds of the working children.

These working and street children waste whatever they earn in hangouts with their friends and end up, in most cases, involving in crimes and bad habits. They need to be trained and brought into the mainstream of society. Such hands-on savings scheme for homeless children is a revolutionary initiative, no doubt. It will help the children to learn how to deposit and withdraw money through a bank account and inspire them to learn the merits of savings philosophy such as saving money, saving time, saving energy etc. Spending wisely and saving money is a habit that does not come by default; one needs to cultivate it. A money-wise child grows up to be an intelligent person. As a corollary from such savings habit they will also learn how to keep distance from avoidable expenses.

Introducing poor children with banking will have far-reaching effects on their 'poverty mindset' and unblock the shackles that "they are born poor".  A poverty mindset manifests itself in a lack of vision for the future. Poverty is more a state of mind and about perspective than about money. Many people stop where they are in life. They don't try to be successful.  They use the excuse 'this is the way I was born; this is my fate and I cannot change it'. Banks, if they are sincere, can easily help transform the blocked fates of these children when they will grow up. A bank account a street child has opened today may one day remind him to sing the old saying: "I am what I am today because of what I did yesterday".

Initially, 10 banks will open accounts for street and working children. Eight non-government organisations will provide support to this initiative. A child can now open a savings account in any of the designated banks with an initial deposit of Taka 10. The juvenile account holders, who will attain the age of 18, will be encouraged to avail of bank loans under entrepreneurship credit programmes.

With periodical savings, weekly or fortnightly, a street child may one day find his savings account fat with money which he can use in future for some constructive purposes. The central bank governor has advised the banks to offer the highest possible interest rates for their accounts. Great!

But, there is a wrinkle. Down the line, say, after 20 years of savings, how much in real value will such a child get from his savings? It is widely known that savers are always losers as inflation eats away their savings. Is it possible for the Bangladesh Bank to offer, on behalf of the government, special subsidy only to the savings accounts of the children, for both school-going and street-treading, on account of inflation protection? The interest rate of their accounts may thus be determined as, say, 4.0 or 5.0 per cent above inflation so that their savings will only increase with inflation but will not decrease with deflation.

Unlike the petted children who are still under the cosy care of their parents, these street children are exposed to harsh realities of life and some of them might undergo many traumatic experiences. However, given their working experiences in real-time business environment, once they attain maturity they could be turned into successful entrepreneurs provided the banks offer them some kind of supervisory credits through an intermediary like a non-profit social organisation.

Children, not nurtured under parental care, are vulnerable to many ills that retard their mental and physical development. They are hapless souls. Timely help to such cliff-hanging children is simply divine. Dr Atiur has risen to the occasion; he seems to have reached out and grabbed those young hands desperately flailing to seek help.

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