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Welcome to the YaFS Hub

Background

The SEEP Youth and Financial Services (YaFS) Working Group brings together practitioners to engage in discussions and analysis of the field that can lead to the development of functional learning products. The Working Group is currently comprised of SEEP Members and other key stakeholders that support programs and services designed to increase economic opportunities for youth and their access and utilization of appropriate financial services. More than 90 individual practitioners have engaged with the group since its inception in May 2011.

About

In addition to providing opportunities for continued dialogue and learning of key industry issues and challenges, SEEP’sYaFS Working Group contributes to the field by responding to critical knowledge gaps in the form of collaborative learning outputs that build on practitioner experiences and are easily accessible and relevant to those interested in expanding work in this area. When the group first came together in 2011, the first activity undertaken was to conduct a multi-disciplinary industry survey to identify gaps in knowledge about Youth Financial Services (YFS). Drawing on extensive consultations with practitioners from around the world, the YaFS WG determined that within the area of YFS, much research has been done to date to map access to financial services for children and youth, primarily on savings. What was missing, however, was an understanding of the global commonalities and trends of the youth market and their financial behaviors, and the means to analyze this information to develop appropriate financial services for young people.

Understanding Youth and their Financial Needs, is an attempt to fill this critical gap and allow practitioners to build on the work being done by projects such as YouthSave Consortium, SEEP’s Innovations in Youth Financial Services Practioner Learning Program, Youth Start and others. The information is derived from an extensive literature review of youth-focused market research undertaken by programs in developing countries complemented by expert analysis by members of SEEP’s YaFS WG.
References to youth within this publication are based on the definition of the United Nations definition of youth as persons between the ages of 15 and 24 years. However, many programs start working with children and youth at the age of 12 (e.g., YouthStart, YouthSave), or even the age of 10 (e.g., Savings Innovation and Expansion for Adolescent Girls and Young Women). In addition, many programs target girls or young women specifically because they are considered a more vulnerable group (e.g., YouthStart–Kenya, Safe Spaces–Uganda) 

Objectives and Implications

Financial knowledge, experience & behaviors, delivery channels, age and gender must be considered in the design of youth financial and education support services, most importantly education support programs. The different factors mentioned can be categorized and examined at 3 distinct levels as mentioned below:

• Client level: Youth money flows and financial knowledge, experience and behaviors, as identified through market research in developing countries.
• Market segmentation level: How different market segments (e.g., age and/or life stage, gender, enrollment status, geographic location) affect youth financial knowledge, experience, and behaviors.
• Institutional level: Examples of delivery channels (for both financial and education support services) that are effective in reaching youth.

This Synthesis captures the insights of a number of stakeholders in the field and provides preliminary guidence for organizations that are contemplating the design and implementation of youth financial service programming. Insights into the money flows and financial behaviors of youth provide an important launching point for FSPs seeking to design appropriate, sustainable youth-friendly products in a way that will ensure both their uptake and usage. However, it may be necessary for an FSP to conduct additional market research to ensure the maximum relevance and applicability of a program in a specific context for a specific market segment. The Synthesis can also serve as reference for policy makers seeking to develop, promote, or strengthen new or existing youth programs within their respective countries. 

This Synthesis looks at the financial decision-making behaviors of youth (e.g., spending, saving, and borrowing) that are directly influenced by their income flows, expected contributions to their families, and experience and perception of formal financial services, as well as their current life stage. It then examines how these behaviors may impact the design of financial and education support services. Emerging best practices indicate that young people benefit the most from financial services when these services are offered in conjunction with nonfinancial services, such as mentoring, financial education, internship opportunities, health education, livelihood skills training, and social asset building. This publication will focus mainly on financial education as a tool for building the capabilities of youth in saving, spending, and borrowing in order to make effective use of financial services. It will also look at how market segmentation and the most effective ways of reaching youth contribute to program design at the institutional level.

Limitations
As previously noted, this publication does not attempt to make the business case for youth financial products or prove the effectiveness or impact of particular youth-focused financial products or services, as these issues are beyond the scope of the market research studies that were analyzed. These are important considerations and should be factored in while developing a new product. For example, when considering youth account preferences for various financial products, an FSP must carefully weigh these preferences against the capacity of the institution and the operational feasibility of a given product to ensure its financial sustainability.
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