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

What Do Youth Have to Say? How Young Voices Drive Financial Inclusion

Originally posted on the MasterCard Foundation Blog.

Gatete is an 18-year-old man from the market town of Naivasha, Kenya. Gatete attends school far from home and lives with his cousins who act as his guardians because his parents are very poor. His uncle pays his school fees. Gatete is in the fourth level of high school and hopes to attend university after completing his secondary education.

Can youth savings bridge the financial gender gap?

On a hot afternoon in September, Savings Specialist Ryan Newton, Market Research Specialist Anjali Banthia,  and I were in a SEWA Bank branch in Ahmedabad, India, conducting a focus group with a few young women who are daughters of SEWA Bank clients’ daughters. Ritu, a 16- year-old girl with her hair pulled into a short ponytail, is a Tejasvi account holder.

#YouthEO Twitter Chat: Scale in Practice

There are over 1.1 billion young people in the world who need to be able to find good jobs, start and grow businesses, gain access to appropriate financial services and overall, participate in the global economy.But how can development practitioners and private and public sector actors meet the growing demand for youth economic opportunity? 

Effective Integration of Financial Services into Economic Opportunities Programming for Youth

The United Nations Population Fund reports that there are 1.8 billion young people between the ages of 10 and 24, with 89 percent of them residing in less-developed countries (2014). In Sub-Saharan Africa, minors often account for more than 50 percent of a country’s population.

Moreover, by 2050, the world’s population will increase by 2 billion, an increase of 28 percent, all of whom will require access to health and education services, and eventually to jobs and self-employment opportunities.

Resource Type: 
Report

Putting Youth Employment at the Heart of Growth

The demographic divide is stark: while industrial nations are aging, the face of the developing world is overwhelmingly young. In Africa for example, nearly 70% of the population is under the age of 30. Tapping the potential of this emerging generation is a critical challenge. According to the International Labour Organization, two-thirds of working-age youth in some developing countries are either unemployed or trapped in low-quality jobs. 

Resource Type: 
Report

What Youth Want: A Guide for Policy Makers

In this review of 25 statements from youth summits and consultations globally, as well as 11 national and regional youth polls, we hear some priorities we expect: youth want jobs, the chance to start their own businesses, and high-quality relevant education.

But we also see that young people everywhere are increasingly concerned about issues of governance, corruption, and both regional and national security.

Resource Type: 
Toolkit