You don't define any rider measurements (like inseam), so how small you need it to be is not totally clear.
Though spendy, Bike Friday custom makes bikes for 'Little People' and the smallest ones, from what I have seen, do not fold. Some have 20" wheels, and the smallest have 16"wheels. The really small ones do not fold.
http://www.bikefriday.com/blog/?p=366
http://www.bikefriday.com/bicycles/bantam_fridays
Again, not sure how small you need one to be.
Lou