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

Why Measuring Child-Level Impacts Can Achieve Lasting Economic Change

More than 600 million children in developing countries live on less than US$1 a day. Children are deeply affected by poverty, and some effects of poverty, particularly in early childhood, have life-long consequences. The fight for long-term poverty alleviation must account for children’s wellbeing in order to sustainably reduce individuals’ and communities’ vulnerability to the persistent effects of poverty.

Help a Child Learn Financial Literacy

OVERVIEW

Infographic: International Financial Inclusion Funding

In 2012, at least $29 billion was committed by international funders to advance more inclusive financial systems in developing countries.

PWC's Earn Your Future: Empowering Future Leaders With Financial Literacy

Through the five year Earn Your Future commitment, PWC is investing $160 million — $60 million in cash donations and one million PwC volunteer service hours — to address youth education with a focus on financial literacy. This report presents "Why It Matters," the program's one-year impact, and the different "Earn Your Future" programs offered.

Resource Type: 
Report

Banking a New Generation: Developing Responsible Retail Banking Products for Children & Youth

The Guide is intended to help decision makers, product owners and all stakeholders in the product development process understand the impact of working with children and youth, and to provide guidelines on how to develop appropriate innovative banking and payment products, while respecting and supporting children’s rights. The Guide is a combined effort by global strategic partners Child and Youth Finance International (CYFI), MasterCard and the wider CYFI Movement.

Resource Type: 
Report

Webinar: Building the Case for Youth Services CYFI - UNCDF - 20/03/2014

Together with Ms. María Perdomo, Youth Start Programme Manager for UNCDF, and Mr. Jules Théoneste Ndahayo from UCU, CYFI reviews UNCDF’s latest publication: “Building the business case for youth services: Insights of the YouthStart Programme." This paper aims to take the first steps in demonstrating that youth are a viable market and focuses on the business case for serving youth if FSPs follow three pathways to profitability of youth services: i)Optimizing expenses; ii) Increasing savings volume; and iii) Increasing return from youth.

Resource Type: 
Video/Audio