It has been wonderful to reflect on the many milestones and achievements of our partners over the past four days. As part of that reflection, today we asked each of our partners for feedback on how to continue working with youth and for youth, and we shared how important it is for UN Capital Development Fund (UNCDF) to look forward to what the future may hold.
Over the past four years, we have learned how financial inclusion can help address the youth employment challenge. In particular, we gained a deeper understanding of the following:
- Types of financial services that best meet the needs of youth according to their socio-economic contexts and developmental stages;
- Business models that financial service providers (FSPs) can use to deliver financial education to youth;
- The business case for youth financial services;
- Types of trainings and tools necessary to improve understanding of the youth market; and
- Changes needed in policies and regulatory frameworks to increase access to financial services for youth.
However, we also learned that, if we want to have greater and long-lasting impact in the lives of youth, we need to go beyond financial inclusion.
UNCDF is currently in the development phase of expanding its programme at the global level for another five years. We will continue to improve financial access and capabilities for young people by deepening our agenda with current FSP partners and using their best practices to scale up the programme across Africa and Asia.
A new aspect of the programme will be to enhance and convene partnerships between FSPs, NGOs, youth serving organizations (YSOs) and other relevant entities serving youth so that youth can either secure decent work or start/expand their own business. While many YouthStart FSPs partnered with YSOs or NGOs, they reiterated during the workshop how challenging it was to forge and sustain these partnerships over time.
For example, some YSOs assumed youth graduates of their programme should receive loans, while some FSPs assumed they were receiving referrals for youth that were ‘loan ready.’ In many cases, graduates of the YSO programme were not equipped with the necessary skills and knowledge to effectively manage a loan. In addition, the catchment area of the FSP did not always coincide with the catchment area of the YSO, which forced the FSP to identify new YSOs with whom to partner when seeking to scale up the programme to other parts of the country.
To address these challenges, UNCDF plans to support FSPs, NGOs and YSOs working together for youth and with youth to build stronger relationships and take coordinated action to design and offer affordable, relevant and accessible financial services and complementary holistic services (e.g., entrepreneurship training, mentoring and apprenticeships) to youth.
YouthStart partners also reflected today on the policies and regulatory frameworks in their countries that have a direct impact on increasing financial inclusion for youth. While the regional pilot of YouthStart was not set up to influence policy, we gathered evidence confirming how lowering age requirements to open or transact on a bank account can have a positive impact on uptake and usage of youth savings accounts—like in Ethiopia.
We also witnessed how, in countries where the regulatory environment favours the use of agent banking and mobile technology, youth have more opportunities to save and increase their savings over time—like in the Democratic Republic of the Congo. And, we saw how an enabling regulatory environment can motivate institutions to develop innovative microleasing products to link youth to concrete economic opportunities—like Umutanguha Finance Ltd. in Rwanda.
If we want to solve the challenge of youth employment, we need to start with policies and regulatory frameworks and not limit ourselves to those related to financial inclusion for youth but also address those responsible for creating an enabling environment for youth economic opportunities.
We all want to see more stories of youth like Zubeda and Idelphonse, two of the young Rwandans that generously shared their experience with us during the first day of this event. We want to see more youth, in particular young women, who are empowered through access to finance, and ensure that they are financially capable and equipped to be entrepreneurs or suitably employed. And, we want to see it now, at greater scale, simply because we cannot afford to wait.