Impacts of Microfinance Initiatives on Children - Introduction

Overview of a study examining how microfinance programs affect the lives of children of different ages and levels of involvement in microenterprises in different regions of the world.

The Canadian International Development Agency, Children's Rights and Protection Unit has recently funded a new publication entitled: Impacts of Microfinance Initiatives on Children.

Microfinance programs have been operating in many parts of the world for more than two decades, and have become a recognized and widely practiced means of reducing poverty. By helping poor and low income families to access credit and other financial services and to apply these resources within productive enterprises, microfinance programs can help families expand their businesses, increase their income and begin the process of moving out of poverty.

As members of families with improved income from the successful management of a microenterprise, children stand to benefit from microfinance initiatives. Children also actively participate in such initiatives, either through work they do in family businesses, through employment in non-family businesses, or as the owner-operator of their own businesses.

The results of the study showed that when family income improves, priority spending areas are generally those that benefit children. Education is the highest priority for spending, followed by health care. Housing and nutrition are other areas of spending that were identified by the study participants.

Overall, understanding how microfinance programs affect the lives of children will help proponents and practitioners of microfinance to determine how their programming can further contribute to the betterment of children's lives, improve the social impact of microfinance programs in general, and help build a future constituency for microfinance services as working children become working adults.