Finance and child labour

Today, nearly 138 million children are in child labour worldwide, down from 160 million four years ago. There are over 100 million fewer children in child labour today than in 2000, even as the child population increased by 230 million over the same period. While this marks a significant decline, 54 million children continue to work in hazardous conditions. 

Child labour is a grave violation of children’s rights: it deprives them of their potential, dignity, education, and health. It perpetuates intergenerational poverty and deepens inequality.

The financial sector should be concerned, as it can potentially fuel the demand for child labour. Growing microenterprises may resort to unpaid family labour, including underage children, to keep up with business demands. Initially missing school at times, children might later drop out of school, and evidence shows that they hardly return. A vicious cycle that perpetuates intergenerational poverty.

In sharp contrast, the financial services industry has many opportunities to positively contribute to eliminating child labour. All stakeholders, including banks and microfinance institutions, insurers and investors, can actively engage. Most importantly, before engaging blindly, stakeholders should understand what causes child labour in specific geographic areas and value chains. Intervention strategies will only be successful if they indeed address underlying causes, as we explained in our article "Responsible finance and child labour: quo vadis microfinance?".  

Social finance work on child labour

Financial inclusion

Through our action research programme Microfinance for Decent Work, the ILO worked with microfinance institutions in Nigeria, Pakistan, and Mali to test solutions linking financial services and child labour reduction. These included loans for school expenses, expanded health insurance, and client training on financial and entrepreneurial skills. The strongest impact was observed in Pakistan, where extending health insurance contributed to a 7% reduction in child labour over 2.5 years (NRSP impact evaluation). More results can be found in our synthesis report. 

Building on this experience, we are now working across multiple African countries through the Accelerating action for the elimination of child labour in supply chains in Africa project (ACCEL Africa). Our approach focuses on expanding access to responsible financial services in high-risk value chains, including cocoa, cotton, coffee, tea, and artisanal gold mining. We are delivering financial education, and strengthening village savings and loan associations (VSLAs) and cooperatives as key enablers of financial behaviour change. In Côte d’Ivoire, Ghana, Mali, Uganda, Nigeria, and Kenya, we are co-designing solutions with local actors to transition from product-driven financial services to holistic, community-based models that support sustainable livelihoods.

Financial education and financial behaviour change

Financial education efforts are ongoing in Côte d’Ivoire, Ghana, Mali, Uganda, and soon in Nigeria, with content adapted to rural realities. These programmes integrate practical tools for budgeting, saving, and planning ahead—and include awareness on the risks of child labour and how households can prevent it. Delivery is anchored through cooperatives, VSLAs, and followed by mentoring provided by trained community-based change agents.

Pushing the frontier of innovation

Since 2022, we are partnering with MobiPay in Uganda to roll out digital solutions that support financial inclusion and reduce child labour in the coffee and tea value chains. Through the platforms, farmers are being profiled, VSLAs digitized, and digital financial education delivered. The initiative also enables access to formal financial services and digital monitoring of school attendance and child labour, helping to drive economical and social change at scale.

To accelerate impact, we launched an Innovation Challenge Fund in four countries. This fund supports local financial service providers and civil society partners to co-create and pilot scalable financial solutions that address root causes of child labour. The process is grounded in needs assessments and participatory design, ensuring services meet the realities of vulnerable households.

In Côte d’Ivoire and Ghana, we are also piloting a biochar production initiative linked to a carbon credit mechanism. This innovation supports rural families to convert agricultural waste into biochar—a valuable soil enhancer and carbon sink—creating income opportunities, improving farm productivity, and contributing to climate resilience. 

Engaging financial institutions

We are also strengthening the capacity of financial service providers to proactively contribute to the elimination of child labour. Workshops in Côte d’Ivoire, Ghana, Mali and Uganda have helped providers better understand their role in supporting decent work and preventing child labour. These efforts are translating into concrete actions. For example, in Mali, we are supporting the national microfinance association (APSFD Mali) to draft and validate a charter on child labour elimination, setting a precedent for industry-wide engagement.

This work encourages financial institutions to review their products, policies, and client engagement strategies through child-sensitive lens—embedding protection measures into the core of their operations.

Sustainable investing

We are working with partners including the Africa Agriculture and Trade Investment Fund and the Common Fund for Commodities to integrate child labour due diligence into investment decision-making. Tailored technical assistance linked to financial flows can help investors and rural businesses alike adopt practices that protect children, increase productivity, and improve household incomes.

In collaboration with the Grameen Foundation's RICHES project, we co-developed tools that guide investors and microfinance institutions to identify, monitor, and mitigate risks of child labour and harmful work conditions—particularly in women’s economic empowerment initiatives.

In 2021, we also assessed the legal and operational responsibilities of financial actors in addressing child labour within the cocoa supply chain in Côte d’Ivoire. The resulting Social Finance Brief offers practical recommendations for actors financing exporters, buyers, and cooperatives.

A broader commitment

Since 2013, the ILO’s Fundamental Principles and Rights at Work Branch (FUNDAMENTALS) has hosted the ILO’s flagship programme on child labour elimination. In 2019, the IPEC+ Global Flagship Programme was launched to lead global efforts to eradicate child labour by 2025 and forced labour by 2030.

The ILO also serves as the secretariat to Alliance 8.7, a global partnership committed to achieving SDG Target 8.7. The Alliance includes over 400 partners and 37 pathfinder countries committed to accelerating solutions and trying new approaches in the fight against child labour and modern slavery.