Paper

Micro-credit: A Means to What End?

How does microcredit help in advancing child welfare?
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This presentation makes a case for microcredit for private voluntary organizations (PVOs). These organizations engage in voluntary foreign aid operations with funding/resources from the USAID, and their primary objective is child welfare. The author presents ideas to support microcredit as an effective tool for advancing child welfare.According to the author, there are six different ways in which the cash earning potential of people can be improved:

  • Appropriate technology;
  • Farming systems research and extension;
  • Sub-sector development (e.g. textiles);
  • Co-operatives development;
  • Business training;
  • Financial services.

As per the paper, amongst the above, the financial services strategy is the most effective one in terms of utility and cost efficiency. Moreover, it also impacts child welfare positively by:

  • Converting outputs of income generation (provided by financial services) into inputs to a child’s welfare by the child’s care givers. This is especially true when the target segments for the financial service providers are women;
  • Aiding child welfare by forming groups of customers (women in this case) and imparting child-care promoting education to them along with financial services.