Highlights from YouthSave’s Multi-Stakeholder Learning Exchange

This month, the YouthSave Consortium, Expert Advisory Board (EAB) and partnering Financial Institution (FI) representatives from Project countries came together in Bogota, Colombia for a two-day learning exchange. The objectives of this meeting were two-fold: 1) to share YouthSave project progress and updates with our partners and EAB members and 2) to exchange lessons and engage our stakeholders on topics that can improve YouthSave’s efforts in developing, delivering and testing youth savings products targeted at low-income youth.  To that end, the event included rich panels and workshops, which facilitated valuable discussion on issues including: the challenges and lessons in developing financial capabilities, innovations in product delivery and technology, and questions around product development and achieving the business case. Some key highlights and takeaways from the meeting are as follows.

A panel discussion on product delivery and technology featured YouthSave’s EAB members. This panel was particularly relevant for the Consortium and its financial partners as they complete the market research phase of the Project and begin exploring methods for product delivery. Key takeaways from this panel included: 

• Branchless banking is a valuable method and consideration for delivering financial products to youth, but it isn’t a panacea for delivery. As Beatriz Marulanda, an Independent Consultant pointed out, branchless banking outlets like point-of-sale (POS) agents have their own costs and requirements. For example, POS agents need to operate in real time, making satellite connectivity a necessity (and an added cost). Agents also have to be willing to learn to manage and operate cash flows accurately and efficiently.
• Understand the extent to which YouthSave’s target clients use technological outlets, such as mobile phones. Anne-Francoise Lefevre, the Head of the Institutional Relations Department of the World Savings Banks Institute (WSBI), stated that knowing mobile penetration in the youth market is valuable in determining the extent to which mobile banking can be used as a delivery conduit.
• The successful uptake of a youth savings product also depends on a supportive and trusted community network. Mike Soto-Class, President of Center for the New Economy, stated that target clients will be more likely to interact with field staff, financial institutions, or POS agents, if they can relate and feel comfortable around those delivery entities.  

A second highlight from the event was an EAB panel discussion on the challenges and questions around developing financial capabilities. Yet another relevant topic for the Consortium, especially as financial partners begin designing products that we hope will also improve the knowledge, skills and attitudes of participating youth in the long run. Key takeaways from this panel included:

• Creating low-cost methods of delivering financial education (towards achieving capabilities) is critical. As Jennefer Sebstad, Independent Consultant and Senior Advisor for Microfinance Opportunities stated, “since financial education is an expense and not a source of revenue, financial sustainability is a challenge with financial education delivery.” As a result, working with community-based programs to provide financial education might make it easier to reach more vulnerable groups (i.e. youth), while serving as a low-cost model and opportunity for scale-up.
• Getting youth to participate in financial education opportunities is difficult. Bilha Maina, Project Manager for FSD in Kenya, maintained that youth need a “nudge” to saving and participating in financial education. This “nudge” can come from providing attractive product features, making a product easily accessible to youth, and/or introducing youth to members in their community that can encourage savings, like school clubs that save or mentors.
• There is a need to find “teaching moments.” Jason Wolfe, Technical Advisor for USAID highlighted the four transition domains of youth development - Education, Work/Employment, Health/Family Formation, Transition to Citizenship – and the importance of finding “teachable moments” for financial education/capabilities across each domain.

But as the event progressed, financial sector representatives had us thinking in greater depth about the innovations, lessons, and questions still left to consider. In a fascinating panel on “Colombia’s experience with Youth Financial Services,” representatives from Banca de las Oportunidades, Banco de la República, Subsidios Condicionados a la Asistencia Escolar, and Oportunidades Rurales shared their experiences with both the delivery and uptake of youth savings products.  The panelists shared institutional experiences with the role of POS agents, ATM systems, and conditional requirements and incentives to encourage savings. YouthSave’s financial partners - BCSC, HFC/Boafo, Kenya PostBank, and Bank of Kathmandu - presented key findings from our market research and shared their experiences and challenges on the provision of other youth savings products.  These presentations raised a number of questions, which were echoed throughout the two-day meeting:

• For financial institutions: what does success in the youth segment look like (market penetration, financial sustainability, profitability, etc)?
• How do we segment the youth market for targeted delivery and product uptake?
• Is there a business case for small savers? And is there a timeline for achieving the business case?
• To what extent should family members be involved in the YSA offering?
• What are appropriate entry points and delivery mechanisms for financial education?
• How much financial education is enough?

Undoubtedly, the YouthSave Consortium and our partners – researchers and financial institutions - will continue to explore the questions and issues raised during the meeting. Stay-tuned as we continue to update you on our Project progress and learning.