Impacts of Financial Inclusion on Youth Development

Does saving from childhood establish a sound foundation for youth to contribute to their communities and families as they enter adulthood? This is a primary question of YouthSave, a savings initiative implemented in four developing countries, targeted at youth aged 12 to 18 years from predominantly low-income households.

Created in partnership with The MasterCard Foundation, YouthSave investigated the potential of savings accounts as a tool for youth development and financial inclusion in developing countries by co-designing tailored, sustainable savings products with local financial institutions (FIs) and assessing their performance and development outcomes with local researchers. The project was 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.

Part of the larger YouthSave project, the Ghana YouthSave Experiment (hereafter referred to as the Ghana experiment) investigated whether and how youth savings accounts affect financial capability; psychosocial, education, and health outcomes; and economic well-being of Ghanaian youth and their households. The research rigor in the Ghana experiment is unprecedented in resource-limited countries; therefore, offers an opportunity to posit causal relationships between savings and youth development.

This endline report, which comes three years after the baseline report, describes the Ghana experiment and presents experimental findings of YouthSave. Key questions the report aims to answer are whether the opportunity to open a savings account improved low-income youths’ 1) savings patterns and performance, 2) financial capability, 3) expectations and aspirations, 4) academic performance, and 5) health attitudes and behaviors, including sexual risk-taking.  

The Ghana experiment’s findings demonstrate that early savings can enable young people to improve their long-term financial and educational outcomes, psychological well-being (e.g., self-efficacy, self-confidence), and future orientation. Equipped with such knowledge and skills, youth can make informed, positive choices in other areas of their lives, including health behaviors.

The report begins with a brief review of the theoretical and empirical evidence on youth savings, followed by a detailed description of the Ghana experiment’s research design, methodology, and implementation. Chapter 2 provides an overview picture of whom the youth in the Ghana experiment are by describing their key demographic and socioeconomic characteristics. Presenting the impact results of YouthSave on various youth development outcomes, Chapter 3 focuses on savings behaviors and financial capability findings, and Chapter 4 highlights nonfinancial outcomes (e.g., education, psychosocial health). Chapter 5 discusses the findings and their practice and policy implications. The report concludes with Chapter 6, which describes the successes and challenges in the Ghana experiment and outlines the crucial next steps in this growing an important area of youth financial inclusion.

Click here to read the full report.