Streetkid-run bank in New Delhi

Street-kids in New Delhi have created their own successful bank:

A related and less carefree spotting came in from New Delhi, India, where more than 1,000 street children have joined together to create a bank that helps them manage the small sums they earn each day. Launched in 2001 by a volunteer aid group called Butterflies, the Children’s Development Bank aims to empower children in several important ways.
Like any other bank, CDB pays interest on the deposits that New Delhi’s street children make. That interest can be a vital incentive to kids who might otherwise spend their daily earnings on cigarettes, candy or other items–or worse, have their meager profits stolen. Money for the interest comes from the repayment of micro loans made to kids 15 years and older. But interest on income is only part of the picture. While adults stand at the ready to help, CDB is managed by children, helping them gain valuable work skills.

Link (via Smart Mobs)

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luag

Indonesia seriously needs this kind of bank as well…
mscot

That is awesome.
BSD

So while the rest of the world marches toward the cyberpunk future (Russia happily leading the way), India is skipping all that towards the post-cyberpunk future?
Muppet

I wonder if the children learn about fractional reserve lending, by which banks lend, and charge interest on, money they do not actually have , becoming filthy rich in the process. I wonder if they learn about the role of the World Bank in the plight of the Third World. ..
zuzu

@TWOSHORT

apparently you do not understand what fractional-reserve lending means. the practice is essentially minting new money, as credit, to borrowers. for example, if a bank has received $1000 total from depositors, but then lends $10,000, it lending at a 1/10 (10%) fraction of their reserve. this ratio is pretty close to current USA regulations.

normally this would constitute fraud, but banks are granted a legal privilege through the central banking system to do this.

http://en.wikipedia.org/wiki/Fractional-reserve_banking
TwoShort

@MUPPET:
Of course they learn about fractional reserve lending, that’s what a bank is. If you keep 100% of your deposits in reserve, you can’t very well lend anything.

I am intrigued by the socio-linguistic implications of the phrase “filthy rich”. Do you suppose street kids in India associate wealth with a lack of cleanliness?
travelina

Very cool! Another micro-capitalism story I like is this one about setting up McDonald’s-style owner-operator franchises in Kenya to run “for-profit retail clinics that provide basic treatments for malaria, respiratory infections and worms”:
http://www.forbes.com/healthcare/2007/10/11/africa-pharmaceuticals-ghana-biz-sci-cz_rl_1011healthstore.html
Encik su

Good kids