Aflatoun Banks

India is a nation that lives in its villages. Although migration to the cities has continued and even accelerated over the years, over 70 per cent of the Indian population still live largely rural lives. It is here that we encounter the tragedy of rural indebtedness.

One of the major causes of rural indebtedness is the cyclical nature of the economy. Agricultural labourers have seasonal occupations and they have seasonal periods of prosperity. These generally follow the summer and winter harvests, where two harvests are possible. This means that there are two periods during which the agricultural labourer finds herself or himself with some money. The tendency is to spend the money almost immediately, precipitated by the arrival from the cities of merchants who come to village fairs that are held to coincide with harvests. Then follows a lean period with the inevitable recourse to the village’s informal economy of usury.

Informal surveys in the schools covered under the MELJOL programme showed that approximately one-third of the students came from homes where there is no habit of saving. The experience of the MELJOL Clubs and the Aflatoun Clubs also showed that children had very little notion about saving money. Many child participation schemes –from cleaning up their area to going on a picnic – would founder for lack of funds. And yet the children often had money with them. There was the spare change they were given by their parents during the harvest. There was the money given to them at festival time by visitors, relatives or guests. There was the money they themselves earned by doing odd jobs – selling snacks, helping with household work – outside school hours. However, if they needed to go on a picnic and needed Rs.5 each (approximately US 20 cents) that would be unavailable to them. Thus emerged the idea that children might want to save.

However the banking system does not reach children in India as the child as investor brings very little to the table and generates a disproportionate amount of paper work and expenditure in terms of work hours. Rural children are specially excluded since banking sometimes does not reach adults in most areas. The most accessible is the postal system but that is not a child-friendly system. Thus the rural poor gets excluded from the banking system and the rural poor child is even more disempowered.

OBJECTIVES:

The Objectives of the Aflatoun Bank can be categorised under the following heads

• 1. To inculcate the habit of saving among rural and tribal children

• 2. To develop in rural and tribal children, the ability to handle money

• 3. To develop in rural and tribal children, a sense of responsibility

• 4. To instill in rural and tribal children, a sense of pride at their ability to intervene and participate in their own world.