Targeted Household Credit Reduces School Dropout for Girls in Fragile States

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Nanziri, Lwanga Elizabeth
Mwale, Martin
Kamninga, Tony Mwenda
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African Economic Research Consortium
Up to 263 million children and youths are out of school. Despite the implementation of universal primary education policies that have seen net attendance reach 87% in 2019, and school completion of four out of five children according to UNICEF, girls account for 49% of school dropouts globally, with 26.4% and 73.6% in the primary and secondary school categories respectively.1 The World Bank argues that “limited educational opportunities for girls, and barriers to completing 12 years of education, cost countries between US$15 trillion and $30 trillion in lost lifetime productivity and earnings.”2 Women and children suffer the most in fragile states. This suffering includes sexual violence and poor access to medical care, and disruption to education, which translates into limited job opportunities. Girls often end up as child brides, while boys end up as child soldiers. For instance, in Mozambique, where up to 800 000 people have been displaced due to civil wars and weather related disasters like floods, female school dropouts has been as high as 94% 11% and 1% for primary, secondary and university education respectively. Relatedly, child brides have been at a record high of 50% of girls, while youth unemployment reached a high of 34% in 2015. All these factors combined can push households, communities, and countries below the poverty- line. Access to finance has proven to be a credible pathway to reducing poverty and inequality. For instance, access to credit enables households to consume today against future incomes, invest in businesses whose returns can be used to increase consumption of services such as health care or education for children, while insurance financial products and platforms provide a form of mitigation and resilience strategies.