Combatting Child Labour with Micro Credit Finance: Experience in Pakistan

Ahmed Muneeb Mehta, Sadia Faro

Abstract

This paper examines the effect of microcredit on child labour in city of Lahore, Pakistan. Firstly, this paper explains the major causes of child labour and then how microcredit is linked with these major causes. The dependent variable of this study is child labor and independent variable is microcredit. Target population of this research is total active microcredit clients of FINCA micro finance banks in Lahore. This research is based on primary data and for this purpose questionnaire method is used for data collection and logistic regression technique is used for data analysis. The result of this study shows that major reason of child labour is poverty. The impact of microcredit on child labour is significant but this is not a single solution to resolve this problem of child labour because there many causes of child labour and microcredit actually fight against these causes. The relationship among microcredit and child labour is strongly explained if microcredit reduce the poverty level of household.