We intend to address an urgent global challenge that bridges peace and economic prosperity: an unprecedented number of youth are coming of age in an environment that is unable to provide them with economic opportunities they need to fulfil dreams. The global economy will need to generate 5 million new jobs every month to employ one billion youth entering the market over the next decade (World Bank 2015), a potentially de-stabilizing force and driver of social unrest in many countries.
Low income youth, especially those that have been displaced, are especially vulnerable to economic insecurity and are marginalized and excluded from mainstream financial services. They need financial tools, and the knowledge and ability to use those tools, to save towards education that builds essential skills for employment and entrepreneurship, and towards investment for business start-up. In Ghana, where we plan to focus initial pilot activities, 40% of the population is under 15, and will find themselves in an increasingly competitive labor market (New America Foundation, 2015). Ghanaian youth recognize this and prioritized saving for education (44%) and business start-up (27%) above all other needs, based on a survey of 825 youth 18-24.
Despite the need for building youth financial management skills, financial institutions do not view youth as viable customers because of low balances and high dormancy rates. Sub-Saharan Africa, at 17% account ownership for those 15-24, has one of the lowest levels of youth access to finance (New American Foundation, 2013). Traditional financial literacy delivered on a one-off basis is resource intensive has had mixed results in driving sustained savings behavior. Youth are proven early adopters of mobile technologies, which can be used to serve youth more cost-effectively.
Our goal is to empower youth to achieve financial independence and build sustained financial management skills that ultimately lead to improved livelihood for themselves and their families. We are in the process of developing a “learn by doing” digital financial capability building methodology (using SMS, and other mobile-based applications to deliver financial knowledge) as a low-cost way to reach youth at scale so they are equipped and empowered to manage their finances with confidence. We will integrate these methodologies with new mobile-based financial products so that youth can “learn by doing” as and when they conduct transactions. Further, mobile-based savings accounts can be accessed without having to travel to a bank branch, which is costly and not always feasible for lower-income youth.
While our initial focus is on Ghana, our vision is to develop a methodology that can be applied across multiple countries and contexts, and across youth-focused development and humanitarian programs. Financial capability building also has essential non-financial impact on youth development, including a future orientation and planning skills, and can be powerful when used in conjunction with youth development programs focusing on humanitarian situations, health, life skills training, workforce development, and entrepreneurship.