Pushing the frontier of financial innovation to combat child labour

Despite growing global awareness, 138 million children remain trapped in child labour. At the same time, the drivers of vulnerability—poverty, informality, and climate shocks—are multiplying, especially in the hardest-hit regions. This calls for innovative development approaches to combat child labour.

In this context, financial service providers (FSPs)—embedded in rural economies and connected to farming households—are uniquely positioned to help families cope with economic uncertainties.

Recognising this, the ACCEL Africa project is working to reposition financial institutions not just as service providers, but as strategic allies in the elimination of child labour. Here’s how:

Building capacity: From awareness to action

Financial institutions may—unintentionally—reinforce harmful coping mechanisms, including child labour. To raise awareness of this phenomenon, ACCEL Africa is building the capacity of FSPs through targeted engagement in Côte d’Ivoire, Ghana, Mali, Nigeria, and Uganda.

These capacity-building workshops provide concrete tools for FSPs to:

• Understand the economic and social drivers of child labour;
• Identify risks embedded in their client portfolios;
• Integrate child-sensitive principles into product design, risk management, and client engagement strategies.

In Mali, this has already led to sector-level change. The national microfinance association (APSFD) is developing a charter for child labour elimination—marking the first industry-wide initiative to align microfinance operations with decent work principles.

Piloting financial innovations for impact

Beyond awareness, ACCEL Africa supports the testing of real-world financial innovations that reduce household vulnerability and improve resilience.

Digital ecosystem for communities and school monitoring in Uganda

In partnership with MobiPay, ACCEL Africa is supporting the digitisation of cooperatives and Village Savings and Loan Associations (VSLAs) in the coffee and tea supply chains. The digital solutions include:

• Digital profiling of farmers, cooperatives, and VSLA groups;
• Integration of financial education modules;
• Real-time monitoring of school attendance and child labour risks.

This holistic platform enhances access to financial services while embedding accountability—ensuring that children stay in school.

Agricultural insurance for climate resilience in Mali

In the Sikasso region, a pilot led by local partners enabled cotton farmers to access area-yield index insurance. This product shields families from climate-related income losses and reduces the likelihood of children being pulled into work during crisis seasons.

Carbon credit innovation in Côte d’Ivoire and Ghana

Cocoa-producing communities are being supported to produce biochar from cocoa pod husks—a practice that improves soil health and stores carbon. The project is developing a carbon credit mechanism to:

• Diversify income streams for cocoa farmers;
• Link climate resilience with economic empowerment;
• Leverage digital MRV (Measurement, Reporting and Verification) systems to track credit generation.

By the project’s end, a replicable framework for carbon credit production will be in place in four communities—including registration, producer group structuring, audit compliance, and a financial model to sustain operations.

Innovation challenge fund: Unlocking local solutions

To scale transformative approaches, ACCEL Africa launched a multi-country Innovation Challenge Fund in 2024, targeting Mali, Uganda, Nigeria, and Côte d’Ivoire. The Fund aims to:

• Enable FSPs and civil society actors to co-design services aligned with household realities;
• Prioritise scalability, gender inclusion, and financial sustainability;
• Ground innovations in local needs assessments and participatory design.

The call for proposals attracted community-rooted solutions tailored to each country’s context. The ongoing selection process reveals a powerful insight: innovation must not only be technological—it must be human-centred and system-aligned.

Looking ahead: From pilot to systemic change

Each of these initiatives—from sector charters to carbon credit schemes—signals a shift in mindset. It calls for a financial system that protects, rather than exposes, the most vulnerable.

ACCEL Africa will continue to document lessons, build evidence, and advocate for integrating child-sensitive financial inclusion into national and global policy frameworks. Our ambition is clear:

To make financial systems enablers of resilience and decent work—so that no family is forced to choose between survival and their child’s future.