Financial Services

Overview

Financial services programs work with regulators, financial institutions, and supporting NGOs and CBOs, to design and deliver financial services and education that respond to the savings, borrowing, and risk mitigation needs of young clients. Inclusive finance can play a critical role in enabling youth to invest in employment or educational opportunities, but is often limited by legal hurdles, lack of collateral, and lack of business experience and financial know-how.

Where are we now?

The youth-inclusive financial services (YFS) sector is working to engage policymakers, donors, financial service providers, NGOs, and youth at the macro and micro levels to experiment with new or adapted financial services that meet the needs of youth, while creating business opportunities for the private sector. At the macro level, efforts are focusing on regulators and policymakers to advocate for youth-friendly banking policies that would allow youth more independent access to a range of financial services, and to develop appropriate youth-inclusive client protection principles. At the micro level, financial institutions are researching the youth market to better understand their financial behaviors and needs; and to pilot financial products and services that promise to meet a young person’s specific financial goals as well as present a future business opportunity for financial service providers (FSPs).

Trends and Best Practices

  • Regulatory constraints to serving younger clients require an FSP to think creatively, i.e. finding alternatives to formal identification and minimum age requirements.
  • To appropriately serve young people, practitioners must first use youth-friendly market research techniques to better understand their financial habits and preferences.
  • Youth financial service needs grow and change as they do. Adolescents only need access to savings services, whereas young adults can use a full range of services. Their needs also differ based on geography, education, marital status and employment. FSPs should consider which market segment they can best serve given their experience and assessment of institutional partnerships.
  • Youth financial products may only differ slightly from those offered to adults, including low or no minimum balance savings accounts and alternative guarantees for credit.
  • The major product differences lie in marketing (i.e. attractive color schemes/special logos and tailored messages for young people) and delivery mechanisms (i.e. thinking outside the branch) and in the accompanying non-financial services (i.e. financial education and entrepreneurship) critical for building a young person’s capacity to save, manage their money, and generate income.
  • YFS are often best delivered in partnership, enabling the FSP to focus on the financial product while partner NGOs or government agencies address the financial education and entrepreneurship needs of young people.

 

Financial Services: Blogs

Close Up on Young Rural People's Economic Empowerment

As part of the NEN Close Up series, the Near East, North Africa, Europe and Central Asia Division hosted a knowledge sharing event on rural youth and economic empowerment in the Near East and North Africa. Through a regional grant, IFAD is partnering with Making Cents International, a social enterprise based in Washington DC, and Silatech, a social initiative working to create opportunities for young people throughout the Arab world, to help increase the employment and self-employment opportunities of more than 18,000 young people of ages 15-35.

Summing up - Blog Mini-Series For Financial Inclusion: A Case For Orphans And Vulnerable Children

Put your finger on the pulse of current practice and research in community-based savings-led microfinance for orphans and vulnerable children. The "Blog Mini-Series For Financial Inclusion: A Case For Orphans And Vulnerable Children" examines the challenges facing orphans and vulnerable children and the promise of financial inclusion for these groups. Read the summary here and the entire blog mini-series at Microlinks.

Youth in the SDGs: Getting Beyond the Rhetoric

Originally posted by Nicole Goldin, January 26, 2015.

Youth Savings Patterns and Performance in Colombia, Ghana, Kenya, and Nepal

The project is an initiative of the YouthSave Consortium led by Save the Children (SC) in partnership with the Center for Social Development (CSD) at Washington University in St. Louis, the New America Foundation, and the Consultative Group to Assist the Poor (CGAP). Research partners (RPs) in the field include Universidad de los Andes in Colombia, Institute of Statistical, Social and Economic Research (ISSER) at the University of Ghana, Kenya Institute for Public Policy Research and Analysis (KIPPRA), and New ERA in Nepal.

Resource Type: 
Report

Knowledge Management Platform for Increasing the Scale and Sustainability of Youth Economic Opportunity Programs

Meeting the needs of the global youth population requires evidence-based, scalable, and sustainable initiatives. In response, Making Cents International offers a demand-driven Knowledge Management (KM) platform that builds the capacity of positive youth development stakeholders worldwide to design, implement, and evaluate high-impact youth economic opportunity programs, policies, and partnerships.
 
Resource Type: 
Report

Recorded Webinar: Youth Savings Services: Are They Worth It?

 
Resource Type: 
Video/Audio