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Promoting Inclusive Markets and Financial Systems

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Bridging the gap: PLP seeks to bring financial services to youth

by on Aug 16, 2011  |  posted in Savings, Youth  |  1 Comment
Originally posted in the July SEEP Monthly Networker: For a week in May, representatives from four SEEP partner organizations assembled in El Salvador to collaborate on creating learning products that will share knowledge on extending financial services to young people in developing countries. The workshop was a part of the SEEP Practitioner Learning Program (PLP) on Innovations in Youth Financial Services, an action learning project implemented by SEEP and The MasterCard Foundation. At the workshop, PLP partners from FINCA-Uganda, Hatton National Bank (Sri Lanka), XacBank (Mongolia), and hosts Catholic Relief Services (CRS)-El Salvador and Enlace completed the planning stages for their learning products and began work on drafting content. The final versions of their products will be made available in the fall, and will cover topics such as youth financial education and effective strategies for marketing, institutionalizing, and creating viable business models for youth financial services. Each PLP partner organization currently offers a portfolio of financial services to young people, giving them firsthand experience to draw from in creating learning guides for practitioners in the field. During the workshop week, SEEP staff and PLP partners also visited an Enlace youth savings group in the town of San Andres. Titled "The Victorious Youth Group" by its 12 members aged 12 to 24, the savings group has been active since December 2010. Group members shared that they planned to use their savings for a wide variety of activities, including paying for school fees, helping out with family expenses, and entrepreneurial activities such as making and selling shoes, jewelry, and cosmetics. Although young people have a number of financial goals, only three percent of the world's youth have access to financial services. The youth market for such services is potentially enormous-people in the developing world between the ages of 12 and 24 number over a billion. Yet many organizations consider youth a high risk market because they lack collateral and financial experience. Youth financial services consequently represent a major challenge and opportunity for microfinance institutions. As the 2007 World Development Report noted, "Youth is a period of intense learning, when people can acquire the human capital they need to move themselves and their families out of poverty." Harnessing young people's capacity to learn good financial habits and the benefits of practices such as saving, borrowing, investing, and insurance is therefore critical to poverty reduction as well. SEEP's Youth Financial Services PLP was created to help financial service providers meet this growing need for products and services tailored to young people. PLP partners seek to provide practical tools and guidelines for organizations currently implementing youth financial services, as well as those interested in doing so in the future. In this way, the outcomes of the PLP will help lay the ground work for the youth financial services sector to achieve scale, and for young people in the developing world today to achieve greater financial understanding and access than generations before them. Find more information on the Youth Financial Services PLP.

1 Comment

Henri Christophe says:
May 05, 2012

The financial education is something many young people never learn during their youth whilst it is very crucial. Every young person should be given opportunity to understand finance, like the article mentioned in developing countries this must be a must. I have seen programmes from developed countries that start teaching kids of the age of 4 the essence of money. Developing countries should follow suit.

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