Financial inclusion for youth: Perspectives from SEEP, BRAC, and Making Cents International

Originally posted on Microlinks

As the youth-inclusive financial services field evolves, it has the potential to scale financial services that also meet the needs of low-income youth globally. In After Hours Seminar #55 held on Thursday, September 1, 2011, three practitioners spoke openly about the challenges and lessons their organizations have experienced in advancing this goal. In doing so, they provided insights on scaling financial products, tailoring financial services to the youth context, and advancing knowledge-sharing efforts in the field. Certainly for me, as a member of YouthSave, a project committed to developing and testing the effects of savings accounts on low-income youth, there were several takeaways and questions that resonated.

First, Santhosh Ramdoss, who works with BRAC USA, suggested that support services need to accompany youth financial products in order for beneficiaries to gainfully employ them. According to Ramdoss, BRAC’s results in extending financial services to adolescent girls in Uganda show that after forming youth clubs, providing ‘girls only’ places to socialize, and facilitating life-skills training (an 8-month process), participating youth are better positioned to receive and productively utilize their loans. Additionally, participating youth have expressed a positive orientation to future goals. 

BRAC has scaled its operations considerably, reaching 6,000 clients and $1.2 million in dispersed loans. This may lead some to wonder – is it possible to scale and create financially sustainable savings products? This is a question that the YouthSave Consortium, especially CGAP, is researching extensively, but there is no simple answer. As Ashleigh Mullinax, Program Manager for the Practitioner Learning Program (PLP) at the SEEP Network suggested, there are several challenges to scaling youth-targeted financial products, such as high costs and potentially low returns from the target market.

Still, through demand-driven efforts like creating effective marketing campaigns, incentives, and even financial education, achieving scale may be possible for organizations that begin strategizing during product development. Lara Storm, Director of Making Cent’s Youth Inclusive Financial Services Linkage Program (YFS-Link), maintained that market research is a core component to tailoring financial products to the needs and wants of youth. To that end, recently our partners within YouthSave began piloting savings products in Ghana and Kenya after 1,300 respondents participated in the qualitative market research process across both countries.  

But issues related to market research, support services, and scaling products discussed during this event are just a glimpse of the questions facing the youth-inclusive financial services field. Hopefully, the Fifth Annual Making Cents Global Youth Economic Opportunities Conference will provide a collective space for practitioners and researchers to dig deeper on issues such as how to monitor and evaluate youth financial services on the lives of youth, the policy and regulatory barriers to access, and the types of financial capability interventions that can allow youth to become better money managers.