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Promoting Inclusive Markets and Financial Systems

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Sustainability

Sustainability

While discussing the four main topics they had outlined for the online learning event, the PLP partners found themselves returning again and again to one critical issue: sustainability. The products and services offered to youth, as well as the whole business of the organization providing them, must be sustainable for youth programs to thrive. Below are the main takeaways from the PLP partners’ discussion on sustainability. What is sustainability?
According to the Asian Development Bank, financial sustainability has three components:
1) The availability of adequate funds to finance project expenditures 2) The recovery of some of the project costs, from the project beneficiaries 3) Financial incentives to ensure participation in the project FINCA Uganda distinguishes between short-term and long-term sustainability:
  • Short-term: Availability of adequate funds to finance project expenditures and financial incentives necessary to ensure participation in the project
  • Long-term: Recovery of some of the project costs from the project beneficiaries (achieved in FINCA Uganda’s case when a target group of youth over time became loyal lifetime FINCA clients, accessing all the other savings and loan products/services)
What factors affect the sustainability of an institution’s youth products and services?
Sustainability entails that the volume of savings deposited by youth clients must be sufficient to at least cover the organization’s costs of providing the service. This can be achieved through recruiting enough youth clients, and ensuring that clients are depositing regularly.
Successful recruitment depends on the investment made into a number of areas, including community mobilization, staff time, incentives, and marketing. Ensuring regular saving requires that youth clients have adequate financial literacy, access to bank branches, and enough money available to potentially save.

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