Unintended Effects of Microfinance: An Increase in Child Labour in Some Contexts?
Abstract:An increasing number of policies in developing countries seek to empower women through female entrepreneurship. Many microfinance institutions (MFIs), for example, lend exclusively to women. Loans are usually combined with capacity building workshops on entrepreneurial activities such as the production of handicrafts, clothes or food to be sold in local markets. While there is evidence that these strategies have been successful in empowering women (Panjaitan-Drioadisuryo and Cloud, 1999), less is known about how such an increase in mothers’ non-domestic labour affects the working hours of their children. In the few available studies, the results are ambiguous: see, for example, Hazarika et al. (2007) and Dehejia and Gatti (2002). Drawing on a study of Mexico (Lehman, 2010), this One Pager points out that policies which encourage the small business activities of women may lead to an increase in child labour. It hypothesises that the provision of family and/or social support infrastructure (full-day schools and childcare facilities), and/or policies that encourage investment in the children’s future, may help mitigate these unintended impacts.
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