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Designing and Delivering Youth Inclusive Financial
Serviceswith a special focus on rural youth
Timothy H. Nourse: Making Cents International
Sponsored by the International Fund for Agricultural Development
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Social Enterprise that increases economic opportunity and financial inclusion worldwide
Provides training and capacity building technical assistance to international and local institutions
Focuses on youth, women, farmers, and growing enterprises
Builds Youth Economic Opportunity field through conferences, research, and hosting of on-line learning platform.
Making Cents
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International Fund forAgricultural Development
IFAD is dedicated to eradicating rural poverty in developing countries
IFAD provides loans and grants to governments, and is involved in project design and direct implementation support
Key areas of IFAD’s investments are rural financial services, agricultural development, irrigation, livestock, markets and infrastructure
Since its inception, the Fund has:Mobilized around USD 21.9 billion in co-financing from domestic sources,
in addition to IFAD’s contribution of about USD 14.7 billion in loans and grants, with the current total investment reaching USD 13 billion
Supported 924 programmes and projects in 119 countries, including 267 projects in 98 countries in the current portfolio
Empowered over 400 million people to break out of povertyIFAD funded the RYEE program – whose case studies you’ll be
learning about today
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SilatechSilatech is a regional social initiative that works to create jobs
and expand economic opportunities for young Arabs. Silatech promotes large-scale job creation, entrepreneurship,
access to capital and markets, and the participation and engagement of young people in economic and social development.
Since being founded in 2008, Silatech has financed over 100,000 youth-owned businesses, and created or sustained over 180,000 jobs.
Silatech currently has programs in 15 Arab countries, including Algeria, Egypt, Iraq, Jordan, Lebanon, Libya, Morocco, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia and Yemen.
For more information, please visit www.silatech.com.IFAD co-funded the RYEE program – whose case studies you’ll
be learning about today
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AgendaTiming Session
9:00-9:30
Introduction to objectives of course and RYEEP
9:30-10:00
Youth – their financial and non-financial needs, differentiated by segment and geography (urban/rural)
10:00-10:30
General Principles for serving Youth
10:30-11:00
Product Design Process
11:00-11:30
Break
11:30-12:30
Financial Services Product Development
12:30-1:30
Lunch
1:30-2:30
Non-Financial Services Product Development
2:30-3:00
Special Case – Value Chain Financing
3:00-3:30
Break
3:30-4:15
Case Study
4:15-4:30
The Future of YFS
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Bringing out the Youth in You
First jobHow old were you?What was the job?How much money did you
earn?
First time you visited a financial institution
How old were you?What were you there to do?What was your impression of
the FI?
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Financial Services and Youth:Financial services help youth to:
Build assetsContribute to the
household Develop positive habits
and skillsFacilitate education and
employmentMaintain employment
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Youth Segments and Demand for FS
Youth Segment
Demand for Financial ServicesSavings Credit Insurance
Early adolescence(Ages 12-18)
Late adolescence(Ages 18-24)Young Adulthood(Ages 25-30…)
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Youth Segments and Demand for FS
Youth Segment
Demand for Financial ServicesSavings Credit Insurance
Early adolescence(Ages 12-18)
Moderate
Low
NA
Late adolescence(Ages 18-24)
High
Moderate
Low
Young Adulthood(Ages 25-30…)
High
High
Moderate* Age range is contextual** Parenthood accelerates transition to Young Adulthood*** Gender also impacts segments
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Rural YouthMore a question of
underemployment, then unemployment
Little access to landMore traditional rolesLower educational levelsStronger community
structures
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Current State of FS Access for youth
• Youth are 33% less likely to have an account at a formal financial institution
• Youth are 40% less likely to have saved at a formal financial institution
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Activity:What’s holding us back?
Discuss in small groups the opportunities and challenges of providing financial services to youth at the:
Client LevelInstitutional LevelEnabling Environment and Policy level
How are these opportunities and challenges affected by trying to serve rural youth?
Ask one person to take notes and be prepared to report out.
LevelQuestions
Opportunity? Challenge? Rural implications?
Client Institutional Enabling Environment
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Key Issues – Client LevelOpportunitiesYouth demand FS to manage risks, plan for the future, and transition through life phases
Technologically savvy.
Parental/community support
Challenges• Perception that FIs are not
for them• Accessing FIs • Financial Illiteracy• Lower volumes demanded
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Key Issues – Financial Institutions
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Key Issues – Enabling Environment
ChallengesAge of MajorityIdentification and
documentation requirements
Inadequate consumer protection regimes
OpportunitiesGrowing interest in
serving youth among central banks
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Rural Finance IssuesClient:Seasonality of income and
cash flowsSeasonal migrationLack of trust in outside
institutions
Institutional:Agricultural activities
dependent on weather and markets
Geographic dispersion of populations
Poor infrastructure
Enabling Environment:• Government
subsidies/agricultural policies may help or hinder ag.
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1. Involve youth In market research and product development
2. Develop products and services that reflect diversity of youth
3. Ensure that youth have safe and supportive spaces
4. Provide or link youth to complementary non-financial services
5. Focus on core competencies through partnerships
6. Involve community7. Establish Institutional
Readiness
Principles Developed in concert with:
Emerging Guidelines for Youth-Inclusive FS
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The Product Development Cycle*
*Source WWB*Source: WWB
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*Source CGAP
Developing the Business Case
Source: CGAP
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Market ResearchRecruit a diverse team,
including Youth expertsUse process oriented
activities that help youth process and depersonalize data
Mix of data gathering techniques
For customers, conduct research at household level to determine youth and parent views
Use research to segment market
Young People’s Capacity to Co-Invest
The use of “money flow” or “asset mapping” focus group tools are an effective way of gaining insight into the kinds of financial and non-financial assets young people manage. A microfinance institution in Morocco that was interested in developing livelihood programming for youth was amazed to see the multiple sources of funds that passed through “poor” young people’s hands.
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Roll Out and EvaluationRoll Out:Adjust product based on
pilotSimilar process to pilot
plan, but on scale of full FI
Preparation, training and marketing critical to success
Evaluation:On-going analysis of
business caseDirect profit/lossCross-sellingLoyaltyDemonstrate CSR
Impact on clientsFinancial knowledgeFinancial BehaviorFinancial Status
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Some Successful ProductsHatton National Bank• School banking program• 503,000 youth savers
Equity Bank – Kenya• Business loan and youth savings
product• 74,000 loan clients, 140,000 savers
Xac Bank – Mongolia• Adolescent girl savings account• 8,000 clients
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Rural Youth Economic Empowerment Project
3 Year Learning Project Funding by IFAD and Silatech5 pilot projects in 4 countries
By project end – over 20,000 youth served with financial services and almost 15,000 with non-financial services
Country
Local Partner (Institutional Type)
Financial Instrument Non-Financial Instrument
Egypt Plan Egypt (NGO)
Savings and Credit Groups
Entrepreneurship and life skills training offered through Savings Groups
YemenAl Amal Bank (Microfinance Bank)
Enterprise Lending (for existing businesses)
Financial literacy, entrepreneurship and technical training offered by NGO partners
Morocco Al Barid Bank
(Postal Bank)Individual Savings Product
Financial literacy training offered through mass media and face-to-face training
Tunisia Microcred (Microfinance Company)
Enterprise Lending (for start-up businesses)
Entrepreneurship and business management training offered by NGO partners
TunisiaPro-Invest (Private Company)
Value Chain Finance (Trade Credit)
Value Chain Development, Entrepreneurship and financial literacy training offered through SMS
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The 9 “P”s of Product Design1. Product: The terms and conditions of the loan or savings product. (the loan tenor, repayment frequency, application documentation, collateral requirements etc.)2. Price: The cost of the product to the end user, set at a level to cover FSP costs (includes interest rate, fees, penalties, transaction costs, etc.)3. People: The management and training of the full range of people involved in delivering the product (human resources; hiring, training, performance monitoring, etc.)4. Promotion: How the product is presented to the client (marketing, advertising, public relations, including formats and delivery channels)5. Positioning: Competitive advantage or niche in relation to other products/institutions as perceived by the target customer6. Place: The product distribution and delivery channels (branches, outreach workers or field agents, ATMs, mobile units, phones)7. Physical evidence: The paper or digital requirements for usage (passbook, promissory note, etc.)8. Process: How the product is delivered (systems, manuals, operating procedures, forms, queues, turnaround time)9. Preparation: Design of non-financial service package to enable the client to use the product most effectively (e.g. financial literacy, business training; links to other resources)
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RYEEP 9”P”s Case Studies
Each RYEEP representative will:Provide an overview of
their institutionDescribe their business
caseDescribe the market
research and product development process they followed
Present their product as per the 9P model
Take questions
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Linking ActivityEach pair receives 4 tilesConnect your 4 tiles to make a
squareOnce connected; find another
pair that has made a square and combine them into a square or rectangle (you may need to rearrange your pieces);
Once connected, find another pair that has made a square and connect them and combine them into a square or rectangle (you may need to rearrange your pieces)
If your stuck – you can trade pieces with the facilitator
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The 11 “S”s of Curriculum and Training Delivery System Design
1. Student: Profile of learners, literacy levels, and learning preferences2. Setting: Conditions, timing, and pacing of delivery3. Scale: Content and time to deliver4. Sequence: Other curricular content before or after this training5. Scope: Knowledge, Skills, and Attitudes contained in curriculum6. Style: Learning/teaching methodology7. Skill-set: Skills needed to deliver, supervise, and coordinate the rollout of training program 8. Sale: How much of the organization, marketing, funding, and delivering can be cost recovered9. Supplies: Supporting materials (training guides, TOT guides, participant takeaways, facilitation materials, equipment/ technology, M&E tools)10. Systems: Delivery system, monitoring, and capacity building 11. Success: Assessment of the reach, depth, and quality of outcomes and impacts
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RYEEP 11”S” Case StudiesIn each group, the RYEEP representative will:Describe the findings
from their market research that related to knowledge, skills or attitudes
Describe the NFS product development and piloting process
Present the NFS as per the 11S model
Take Questions
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RYEEP Lessons LearnedServing rural youth effectively will require both youth and rural adaptations.
Integrate YFS into rural strategies..Use different approaches for different age groups.
Target NFS carefully and engage partners to meet remaining needs.
Subsidize start-ups. Engage new partners and innovative technologies.
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Sample content pageBulleted list on left Bulleted list on right
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YFS – Remaining Challenges and Potential Solutions
Challenges The Business Case Financing Programs that
Build Financial Capability Developing regulations
that balance access with protection
Developing a suite of products that “grow” as youth do
Scaling up products
SolutionsBehavioral economic
models providing promising approaches
Technology may be enabler, though how to use it effectively for youth remains a question
Mainstreaming youth into financial service provision strategies for households provides promising strategy
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Additional Resources
Youtheconomicopportunities.org
Global Youth Economic Opportunity Conference
(www.youthEOsummit.org)September 28-30, 2016
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Thank You!Timothy H. Nourse
PresidentMaking Cents International