2011 ─ Children, Youth & Finance 2011

The story of the Child and Youth Finance Movement

How Children, Youth & Finance was Compiled

REAching 100 Million Children

Impacting the Individual Child

Early Successes and Innovation in Financial Education and Financial Inclusion

Exploring the System: Where does it currently stand?

Addressing Children & Youth’s Financial Realities through the Theory of Change

Children, Youth & Finance 2011

Children, Youth & Finance 2011

Š Child and Youth Finance International (CYFI)

September 2012 – Version 1 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, or otherwise without the prior permission of Child and Youth Finance International.

Please contact CYFI Secretariat PO BOX 16542 Amsterdam, The Netherlands Tel +31 (0)20 52003900 Email: info@childfinance.org This report and additional online content are available at www.childfinanceinternational.org.

For comments, please contact info@childfinance.org For latest data, please visit www.childfinanceinternational.org.

Publication design: Frissewind profs in communicatie en design

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Children, Youth & Finance

Acknowledgments We would like to take this opportunity to thank all the people who made this publication possible through their tireless efforts and dedication to the Child and Youth Finance Movement. Their commitment, knowledge and expertise have been invaluable in helping shape this global Movement. There is no doubt that their continued support will see the Movement reach beyond its targets.

In particular, we would like to thank the members of the Working Groups who assisted in the creation and compilation of this document: • T he Research Working Group members who have created the Theory of Change for the Movement and who have been leaders in pioneering research in the field of financial capability for children and youth • T he Education Working Group members who collaborated to form the Child and Youth Finance Education Learning Framework and who have created and contributed to the Education Survey. This provided key data for this publication and assessing the baseline for the Movement.

• T he Inclusion Working Group members who were among the first to establish criteria for appropriate banking products for children and youth. Their inputs in creating the Banking Survey were invaluable, and allowed for the collection of information on existing banking products across the world.

We would also like to thank our donors and pro-bono partners, whose faith and unwavering support has allowed us to do so much in such little time.

Thank you for dedicating your time, energies and passions and thank you for sharing our vision.

Many thanks to our interns, past and present, who are part of the extended Child and Youth Finance Family. They have inspired us with their commitment and thirst for knowledge.

And last but not least, a big thank you to our volunteers across the world who commit their time and expertise simply because they believed in the power of the Movement.

The Child and Youth Finance Team

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Contents Acknowledgments

5

Executive Summary 9

6

1 The Story of The Child and Youth Finance Movement

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2 How Children, Youth & Finance was Compiled

20

2.1

20

Methodology

2.1.1 Primary Sources

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2.1.2 Secondary Sources

22

2.2

Limitations

23

2.3

Conclusion

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3 Addressing Children & Youth’s Financial Realities through the Theory of Change

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3.1

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Financial Adversities Confronting Children and Youth Today

3.1.1 High Unemployment: A Reality Harming Youth

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3.1.2 Dept: A Danger for Youngsters and Their Families

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3.1.3 Poverty: The Real Trap

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3.2

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Building the Financial Knowledge, Skills and Opportunities for Children and Youth

3.2.1 The Child and Youth Finance Movement Theory of Change

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3.2.2 Creating a System

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3.3

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Conclusion

4 Exploring the System: Where Does it Currently Stand?

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4.1

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Child and Youth Financial Inclusion and Education in Need of Attention

4.1.1 Financial Education

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4.1.2 Financial Inclusion

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4.2

Coordination and Support on the National Level

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4.3

Conclusion

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Children, Youth & Finance

5 Early Successes and Innovation in Financial Education and Financial Inclusion

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5.1

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Innovation in Pedagogy in Financial, Social, and Livelihoods Education

5.1.1 Innovation in Financial Education

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5.1.2 Innovation in Social & Life Skills Education and Livelihoods Education

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5.1.3 Combination of Child Savings Products and Three Educational Components

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5.2

Innovation in Banking Products and Channels of Distribution

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5.3

Impact on the Public Regulatory Framework

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5.4

Conclusion

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6 Impacting the Individual Child

68

6.1

Linking Combined Financial, Social and Livelihoods Education with Financial Inclusion

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6.2

Savings and Quality of Life Increase

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6.3

Increased Entrepreneurship

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6.4

Evidence from the Field

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6.5

Further Testing the Theory of Change

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6.6

Conclusion

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7 Reaching 100 Million Children

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7.1

Taking on the World’s Financial Challenge

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7.2

Studying Previous Movements

76

7.3

Setting the Wheels in Motion: Building a Child and Youth Finance Movement

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7.4

Beyond 100 Million Children

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7.5

Conclusion

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Bibliography 84 Glossary of Terms

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Annex 1 - Letter of Support from the United Nations Secretary General

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Annex 2 - Compiled Information on Education Products based on CYFI Education Survey

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Annex 3 -Education Programming Index

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Annex 4 -Banks Participating in the Banking Survey

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Annex 5 -Global Banking Restrictions on Children and Youth

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Children, Youth & Finance

Executive Summary No one has been immune to the great financial challenges of the last decade. All over the world, children and youth are especially confronted with financial difficulties in a landscape marked by economic instability and financial uncertainty. Consider the worldwide trends: • Global youth unemployment stands at 12.6%, according to the International Labor Organization. Some countries face youth unemployment levels as high as 46.6%.

• There are 2.2 billion children in the world and less than 1% have access to financial education and financial inclusion.

• Only 37.9% of youngsters aged 15 – 25 have accounts at a formal financial institution. Not one institution has ever explored the realities for children younger than 15 years old.

• 1 billion of the world’s children are living in poverty. The repercussions of poverty include lower levels of education and healthcare and increased instances of homelessness and abuse.

These worrying global trends are exacerbated by the financial crisis that global economies have witnessed over the past years. This global crisis has highlighted the need for financial markets to cultivate the Economic Citizenship of individuals so that they save, spend and invest more wisely and responsibly. As demonstrated, failing to pay attention to the critical financial development needs of a whole generation can result in severe consequences to individuals and, as a result, to entire economies. Europe’s Committee of Social Affairs, Health and Sustainable Development warns that the world is in danger of creating a “lost generation” who will pay a high price for the consequences of these financial burdens.

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Children Youth & Finance: The Movement The Child and Youth Finance Movement was established to address this crucial global issue. It is a Movement which listens to the concerns of children and youth, and works with policymakers, education providers and a wide variety of global stakeholders to undertake a unified global effort to reshape financial markets. In effect, the goal is to create financial markets which: • Provide holistic financial education for all children and youth.

• Facilitate access for children and youth to appropriate financial products, primarily savings accounts.

• Ensure that the interest of the child is placed at the forefront, and that the risk of exploitation is minimized.

• Allow for equal opportunities for employment and entrepreneurship for all children and youth.

By responding to the needs of children and youth in this manner, the Movement aims to increase the financial knowledge and capability of individuals at an early age. The positive benefits for the individual child are great: they will develop the knowledge, skills and opportunities to become ‘Economic Citizens’. This means that they are able to: • Reduce income poverty and asset poverty.

• Increase their economic and social engagement.

• Develop sustainable livelihoods.

• Augmentation their economic and social well-being.

• Recognize their rights and responsibilities to self, family and others.

Building these capabilities will further the socioeconomic advancement of millions of individuals, their families and their communities. At the national and global levels, the effects of these translate into healthy and stable financial systems.

‘Financial awareness of consumers, young and old, is an urgent need…

The question arises of where it is best to start with enhancing financial awareness? The answer to this question is clear cut. That is with the children.

Adult behavior often goes back to behavior learnt as a child. This is just as true for, say, doing household chores as it is for handling money. Research also shows that adults who had received a sound financial education at younger age were better at managing their money than those who had not.

So to be clear on this, to prevent future financial failures and problems, financial education with a special focus on children is needed.’

Mr. Nout Wellink, Ex-Chair of the Basel Committee on Banking Supervision and Ex-President of The Dutch Central Bank at the 2010 Child Finance Experts’ Meeting

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Children, Youth & Finance: The Publication As a key step towards creating impactful and systematic change, this publication has sought to investigate the status quo for the system surrounding children and youth’s financial issues. It seeks to understand the factors underlying the global financial challenges for children and youth; determine a theory of change; study innovations; assess the impact on the child and the determine the systems that need to change so that today’s negative trends can be reversed.

This publication is the first in what will become an annual series of publications documenting the state of the Movement and providing analysis of current trends and gaps which need be addressed. Future publications will expand on research and findings in tandem with the progress of the Movement.

Children, Youth & Finance begins in Chapter 1 with an introduction and a brief history of the Child and Youth Finance Movement and its international Secretariat.

It explores how the Movement was born in response to the concerns shared directly by children and youth. It outlines the Movement’s target of reaching 100 million children and youth in 100 countries by 2015.

Chapter 4 therefore explores the current system, presenting a view of the availability of holistic financial education and financial access for children and youth by organizations and governments.

It notes that there exist large gaps in adequately addressing present and future financial issues of children and youth at the global level.

Chapter 2 outlines the methodology in collecting the data which is used to inform this publication.

It details the two key surveys distributed to Financial Service Providers and to NGOS. It also highlights the key data limitations faced in the creation of this document – namely, that there exsists a distinct shortage of data available on financial indicators for children and youth.

Chapter 5 of Children, Youth & Finance highlights some of the innovations which are taking place to tackle these gaps.

Each addresses the different components involved in increasing holistic financial education and financial access for children. The chapter shows that while such efforts are important, they are often independent and uncoordinated.

Chapter 3 focuses in detail on the financial adversities facing children and youth, particularly unemployment, debt and poverty.

The chapter then presents the Movement’s Theory of Change as the foundation of how these adversities can be addressed through the development of the necessary capabilities in the individual.

The Theory of Change stresses the importance of creating the necessary systems to support the building of financial capabilities among children and youth.

Chapter 6 highlights the effect of these efforts on the individual child, within the framework of the Theory of Change.

Backed by some emerging evidence from current efforts worldwide, the chapter portrays how individuals can begin to benefit from their increased skills, opportunities and rights at a young age.

But how best to reach 100 million children and youth? Chapter 7 explores this key question.

It shows that the ChildFinance Movement, like other Movements before it, will succeed with the combined efforts of multiple organizations under a unified strategy.

By 2015, the Movement will generate the necessary momentum to reach a tipping point after which the systems will be in place to reach remaining one billion nine hundred million children and youth.

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Children, Youth & Finance

Chapter 1

The story of the Child and Youth Finance Movement

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Chapter 1

The story of the Child and Youth Finance Movement The Child and Youth Finance Movement focuses on facilitating the creation of the necessary systems and policies for maximizing the financial capabilities of children and youth. Years of listening to the voices of children and youth has led to the establishment of the Child and Youth Finance Movement. Organizations working directly with children and youth have shared their experiences and insights, allowing for the Movement to focus on the most critical issues affecting this young generation.

Child Helpline International one such organization. It has listened to over 13.4 million calls across 131 countries1 and compiles data annually on the issues that most affect children and youth. Prominent among the reasons for calling are abuse, social exclusion, bullying and health-related issues. Analyzing these calls has revealed that poverty and other financial burdens play a large role in creating and worsening these situations.2 If financial burdens significantly lower the quality of life for children and deprive children of their rights, it becomes clear that furthering the financial empowerment of children is a crucial preventative solution. The concept of a Child and Youth Finance Movement was therefore a natural progression in tackling the problems at their roots. In a bid to understand the key financial needs and gaps in the financial capabilities of children and youth, a survey was distributed to children and youth aged 6 – 20 years old through social media. Focus group discussions with children

1 2

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were developed in parallel. In total, 210 children from 31 countries participated. Through these forums, children were able to share their views on the nature of specific financial issues they face.

At the same time, a survey was sent to experts working in the fields of children’s rights, finance and financial education. They were asked what they believed were the most crucial elements for a movement dedicated to children’s finance empowerment to contain. 204 experts from 20 countries shared their views.

The unanimous result from both surveys was that both the children and the experts saw a need for the existence of a Child Finance Movement. The results of the two surveys eventually helped form the key strategic pillars of the Movement. These included: • Financial Education • Financial Inclusion • Policy and Regulatory reform • Research • Outreach efforts

Connecting to Children, 9th ed, (Amsterdam: Child Helpline International, 2012).

The United Nations Violence Against Children Study listed the creation of child helplines as a key proposal to creating accessible and child-friendly systems and services. These can be found here (pages 21 & 22): http://www.childhelplineinternational.org/assets/cms/File/Fourth%20VAC%20Report%20-%20English%20-%20FINAL%20COPY.pdf

Children, Youth & Finance

1. The story of the Child and Youth Finance Movement

• The Child and Youth Finance Movement is a direct response to the concerns and difficulties voiced by children and youth.

• The idea was born in 2010 and was supported by both children and experts.

Four working groups were created to focus on each of the strategic pillars of the Movement.

• The Child and Youth Finance Movement’s Research Working Group created the Movement’s Theory of Change, which outlines the necessary compo­ nents for developing Economic Citizenship within every child and youth.

• Working groups of experts focused on the different strategic pillars of the movement, financial inclusion, financial education, and the creation of the necessary systems.

• In 2011, a unified strategy was created for the Movement for activities to be carried out through 2015. The Movement’s goal is to reach 100 million children in 100 countries by 2015.

• Child and Youth Finance International (CYFI) was founded as the central Secretariat which will coordinate the Movement.

• The Movement was launched in 2012 at the CYFI Annual Summit.

• Through the collaborative and unified efforts of involved partners, the Movement works towards reaching the established goals.

In June 2012, the Child Finance Experts’ Meeting took place in the Netherlands. It saw 197 experts share their insights, expertise and support in developing this movement. The strategic areas were agreed upon and led to the formation of the foundation of the Movement’s strategy. Over the course of June 2012 – July 2011, specialized experts came together in dedicated working groups to focus on each of the key strategic areas of the Movement. The Inclusion Group, made up of financial regulators from over 20 countries, focused on the creation of Child and Youth Friendly Banking Product criteria to guide the creation and provision of banking products for children and youth. The Education Working group, co-chaired by OECD and UNICEF, created a Learning Framework for financial, social and livelihoods education to guide the creation and provision of related programming. The CYFI Research Working Group, comprised of leading academics in the fields of financial literacy and children’s rights, created the Movement’s Theory of Change (explained further in Chapter 3).

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The combined efforts of these working groups eventually led to the creation of the Movement’s Strategy from April 2012 2015.3 The global strategy outlines the steps the Movement will take to increase financial inclusion, holistic financial education and the creation of policies that support these goals at the local, national and global levels.

The Movement’s Strategy is built upon the recognition that it is necessary to harness the power of collaborative efforts in order to bring about an impactful change that will eventually reshape global financial systems. No single organization can achieve this. Studies of previous social Movements, such as the Polio Movement and the Movement in Child Labor, reinforce this ideology. A critical factor to the success of both these Movements was the commitment of multiple actors to join forces and coordinate their efforts and place their issues on the agendas of policymakers. Similarly, The Child and Youth Finance Movement will harness the expertise and reach of existing and new organizations as it moves toward a unified target. This target has been set at 100 million children in 100 countries by 2015.

Building a Child and Youth Finance Movement (Amsterdam: Child and Youth Finance International, 2011).

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While this target may seem ambitious, it is also realistic. In reality it involves reaching only 5% of the total child population.

As we will show over the course of this publication, the combined outreach of governments, financial institutions, education service providers and other related stakeholders is already great. By introducing financial inclusion and holistic financial education into new and existing programming, the possibility of reaching 100 million over 3 years becomes a very likely one.

To ensure the coordinated efforts necessary for the success of this Movement, “Child and Youth Finance International” (CYFI) was established in July 2011. This NGO houses the Secretariat, who is responsible for increasing the number of stakeholders in the Movement, collecting and disseminating information about the Movement, and collecting data that will help in the monitoring and assessment of its efforts and impact.

In April 2012, the Movement was officially launched at the First Annual Summit & Awards Ceremony. This Summit brought together 346 participants from 83 countries, including 70 children and youth from 40 countries. Here, stakeholders had the opportunity to share, meet other innovative leaders and commit to the Movement. United Nations Secretary General Ban-Ki Moon sent a letter in which he expressed his support for the Movement’s efforts.5 This letter can be found in Annex 1.

Child and Youth Finance International is not interested in being an adult-led organization that purports to address the needs of children. Instead, we aim to glean our information and form our policies in response to their voices. To this end, at the Annual Summit in 2012, young people were given the opportunity to hold a separate 1-day meeting6, where they shared their views on finance, and drafted a set of policy recommendations7. They then presented these recommendations at a plenary session and had the opportunity to discuss their ideas in dedicated break-out sessions with adult participants.8

Overview of results from Word On the Street surveys4 On Education

• 93% of adult respondents said a lack of understanding of money and resources hinders the development into adulthood of children and youth.

• 87% of child respondents wanted to be taught through games (such as board games) wanted a higher level of money management taught in schools, and wanted to learn about how to help their parents.

On Access

On Influence/Regulation

• 78% of respondents believed collaboration in the form of a united body for Child and Youth Finance to be essential in driving the movement forward.

On Research

• 63% of child respondents and 56% of adult respondents believe that more studies should be done in the field of Child and Youth Finance.

• 70% of the children and youth liked the concept of “child-friendly” bank accounts, with easy withdrawals and operation facilities. 49% liked the idea of a matched fund account.

• 86% of adult respondents identified limited access to savings mechanisms and the existence of unsafe savings mechanisms as barriers.

The Word on the Street (Amsterdam: Child and Youth Finance International, 2012).

Ban, Ki-Moon, Letter from the UN Secretary General to the First Child and Youth Finance Summit, letter, April 2012 6 The Children’s Meeting took place one day prior to the CYFI Summit. Children were aged 8-18 and represented 40 countries. They had largely different social and economic backgrounds. Children bonded through the use of art, games, debates and role playing, to discuss the subject of child and youth finance. They were facilitated by Jeff DeCelles, GrassrootsSoccer, Director of Curriculum, Partnerships & Innovation and Professor Lata Narayan, Centre for Equity for Women, Children and Families (Tata Institute of Social Science) 7 Child & Youth Finance International First Annual Summit & Awards Ceremony April 3rd-4th 2012 (Amsterdam: Child and Youth Finance International, 2012).

8 Ibid 4 5

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Children, Youth & Finance

1. The story of the Child and Youth Finance Movement

The recommendations have not gone unnoticed.

Policymakers paid special attention. In fact, members of the Mexican G20 presidency immediately responded to these recommendations at the conference itself, promising to address the financial needs of children and youth. Two months later, G20 leaders made a declaration in which they recognized the need for youth to have access to financial services and financial education.9

The Child and Youth Finance Movement is still in its stage of infancy. Since its launch in April 2012, there has been a surge in the amount of interest, involvement and commitment to this global movement. We know that with every passing day, we are closer to making our target of reaching 100 million children in 100 countries a reality.

Such developments are crucial to building momentum for the Movement. According to research by McKinsey & Co., once we coordinate our efforts towards reaching 100 million children, the Movement will amass enough momentum to create a tipping point. After this tipping point, it will become possible to reach scale in a short period of time. This is because, as we move towards the tipping point and more and more governments and other key players are involved, policies and structures and systems will be restructured.

This will mean that, eventually, all children and youth in the world systematically benefit from the knowledge that comes with being financially conscious and aware. More details of the expected trajectory of the Movement are provided in Chapter 7.

The Word on the Street: Summary of quotes by children and youth10 I am a street child who earns 60 rupees (€1.06) a day.

I spend it. I don’t save as that would make me kuripot [cowardly] and less willing to take risks. Maybe if I knew how to manage money and invest it to make more money, I would save. I want to know how to do that and try it out for myself.

• I want to learn about saving and enterprise. Can I learn more about business, so that I can set up my own business?

• I want to know how not to get caught in a scam and be cheated by others.

• There are lots of things I can spend my money on – games, mobiles, etc. I don’t know what the best thing to buy is and how to choose between the different things on sale. I would like to learn this.

“G20 Leaders Declaration”, G20 Mexico, (2012): http://g20mexico.org/images/stories/docs/g20/conclu/G20_Leaders_Declaration_2012.pdf (accessed July 18, 2012).

10 The Word on the Street (Amsterdam: Child and Youth Finance International, 2012).

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Chapter 2

How Children, Youth & Finance was Compiled

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Chapter 2

How Children, Youth & Finance was Compiled In compiling Children, Youth & Finance, Child and Youth Finance International (CYFI) used both primary and secondary sources. The primary sources included surveys that were distributed to education providers and to financial service providers. The secondary sources consist mainly of demographic databases of multilateral institutions used to complete global, regional and local overviews of populations. CYFI took special care to ensure that as much information from the partners in the CYFI network has been included in this publication, though we recognize that it is still incomplete and will need further refinement.

Figure 2.1 Regional Distributions of the Survey Respondents: CYFI Education Survey 2011

11% 8%

30%

20% 31% Africa Americas Asia/Pacific Source: CYFI Banking Survey

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Children, Youth & Finance

Europe MENA

2.1 Methodology 2.1.1 Primary Sources

CYFI Educational Survey: The educational survey was created with the guidance of experts from within the Education Working Group at CYFI. The Education Working Group has the purpose of defining and assessing the various components of financial, social and livelihoods education programs of NGOs, governments and other education providers within the CYFI network. The survey was distributed to 492 organization of which there were 30 respondents, sharing information on 41 programs. The response rate for the survey was 6%. Of those responding to the survey, programs were concentrated in the Americas and Africa, 31% and 30% respectively (refer to Figure 2.1).

The respondents were almost entirely NGOs running various types of financial, social and/or livelihoods programs.

The survey asked about the geographical distribution and type of programs being offered, the number of children being reached through the programs and (if applicable) the amounts being saved. Analysis of the survey revealed the number and type of educational programs currently being offered by respondents and the total number of children participating and the number of children saving both formally and informally within the specific programs. The survey also contained a section in which respondents could describe their program in detail. This qualitative section of the survey provides the case studies found in chapter 5.

CYFI Banking Survey: The banking survey was created with the guidance of the CYFI Inclusion Working Group at CYFI with the purpose of evaluating how financial service providers (commercial banks, coops, microfinance institutions, postal banks and savings banks) are serving children and youth, with a particular focus on distribution channels of products and barriers faced by the financial institutions in offering these products. The survey was available in English, Russian, Spanish and French and was distributed to 700 financial institutions. We received responses from 55 financial institutions in 32 countries, reporting on a total of 47 banking products for children

2. How Children, Youth & Finance was Compiled

• Children, Youth & Finance compiles research and data from secondary resources, the Child and Youth Finance International Research Working Group, and surveys conducted by the CYFI Secretariat.

• The secondary resources provide key statistics that illustrate the global issues confronting children and youth today.

• The CYFI Research Working Group’s literature review gathered findings of numerous academic experts in the limited field of financial inclusion and financial education for children and youth.

• The CYFI Education Survey and Banking Survey analyzed the programs of current CYFI partners and measured their progress.

• The limitations of the presented data are the lack of sharp impact measure­ ments, the lack of organizations offering child savings and financial, social, and livelihoods education, shortage of monitoring, evaluation and impact evaluation systems, and small CYFI survey sample size.

Figure 2.2 Number of Child and Youth Finance Education Programs by Country Both Civil-Run and Government Agency

1-3

3-6

6-7

7-11

No data

Source: CYFI Banking Survey 2011

Children, Youth & Finance

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and youth. The survey had a response rate of almost 8%.

The regional distribution of the survey was concentrated in Europe and Asia, at 31% of survey respondents for each. (See Figure 2.3) The survey asked questions on the availability and characteristics of products which financial institutions have been providing to children and youth. The survey reveals the efforts to include minors in the financial system by financial institutions worldwide.

Presentation of Data Surveys were accepted until 30 March, 2012, a few weeks prior to the Child and Youth Finance International Summit in Amsterdam. All of the information from the surveys has been placed on the website of CYFI, which can be found at www.childfinanceinternational.org.

However, the Movement is dynamic and stakeholders have been keen to have their information added or updated on the website. This has meant that updated and additional surveys have been submitted and this additional research has also been added. Therefore, there might be some organizations which are present on the website yet are not found in this publication.

Annexes 2 and 3 provide an overview of the aggregate data collected from the 31 respondents of the Banking Survey. Programs are broken down by indicators such as type of organizational work, regions of activity and target age group. In Annex 3, each program is presented against the sub-components of social, financial and livelihoods education as presented in the CYFI Learning Framework.

Figure 2.3 Regional Distributions of the Survey Respondents: CYFI Banking Survey 2011

19% 31% 3%

16%

31%

Africa Americas Asia/Pacific Source: CYFI Banking Survey

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Children, Youth & Finance

Europe MENA

Annex 4 lists the organizations which took part in the Banking Survey. As some of the respondents to the banking survey have requested confidentiality not all the information from the survey respondents will not be found on the website.

Some case studies and research papers presented throughout this publication were released later than 30 March 2012. We have chosen to include these in the document as they were very important studies from partners in the network and were deemed necessary to profile in this document.

2.1.2 Secondary Sources

The secondary data in Children, Youth & Finance was obtained from reports published by international organizations such as OECD, UNICEF, UNCDF and the World Bank. The organizations’ databases provided regional and country level indicators, such as Gross National Income per capita (in USD), percentage of the population (aged 15 or older) making mobile payments and percentage of the population with formal bank accounts. Furthermore, Children, Youth & Finance incorporates expertise and case studies from published reports such as UNICEF’s Innocenti Report Card 10: Measuring Child Poverty, UNCDF’s Policy Opportunities and Constraints to Access Youth Financial Services and Making Cents International’s State of the Field in Youth Economic Opportunities 2012: A Guide for Programming, Policy Making and Partnership Building.

CYFI’s network of academics and experts collaborated on the Children & Youth as Economic Citizens: Review of Research on Financial Capability, Financial Inclusion, and Financial Education to establish academic advocacy for the Child and Youth Finance Movement. The report, is written by 16 leading academics who have synthesized findings of various academics, defines the Theory of Change and explores existing literature that demonstrates the benefits of the Theory’s three key components: financial inclusion, financial education, and financial capabilities. In addition, the report provides evidence on the impact on not only children and youth’s economic well-being (income, savings, assets), but also on their health (including reproductive and sexual health), emotional well-being, academic achievement (high math scores), and expectations for the future.

Although Children, Youth & Finance compiles data from various sources, present indicators demonstrate limited internal validity and fall short in measuring the short-term and long-term impact of financial products and financial, social, and livelihoods education on children and youth.

The lack of sharp impact measurements corresponds to two shortages: the number of programs that provide both financial inclusion and a holistic education program and the number of such programs that conduct M&E. The first shortage results from the lack of organizations that have existed long enough to have implemented comprehensive, multi-faceted financial programs and tested their effectiveness. The leading organizations in financial education might provide a variety of programs, but they are implemented separately and may not mirror the CYFI Education Framework. The latter shortage results from the lack of financial service providers (FSPs) that monitor children and youth´s savings behavior. Even those that provide savings and current accounts to minors have not documented their usage well enough to accurately understand how they are molding children’s money management attitudes and behaviors. Moreover, most of the data on children’s savings have been acquired from financial education programs that have savings components, which don’t accurately measure the current state of financial inclusion of children and youth. Impact evaluation systems have been overlooked because they are either too costly or institutions have not collected sufficient outputs to analyze.

This shortage presents challenges in understanding which program components are the most progressive.

The secondary data used to measure the reach of financial education programs created by governments and other national data on savings is limiting because it doesn’t focus on children and youth. While creating this publication, the need for a CYFI survey for government agencies and financial authorities became apparent. The number of government initiated financial education programs, their educational components, reach, and impact can only be accurately measured from the direct responses from educational ministries and policy makers around the world.

2. How Children, Youth & Finance was Compiled

2.2 Limitations

The limitations of the CYFI surveys also include small sample sizes. This demonstrates that organizations are either unaware of the vision of the Movement or have insufficient information to answer CYFI surveys. In addition, the survey is prone to self-selection bias in which the organizations of the survey respondents have monitored and evaluated sufficient, positive outputs to share; resulting in a more positive snapshot of the Movement’s starting point. Therefore, the goal of the publication is to convince potential collaborators that their participation in the Movement is urgent, valuable, and integral to the future of children, youth and their society. Further metrics and records of children and youth’s financial activities and education must be developed to accurately assess the progress of the Child and Youth Finance Movement. Proof of progress and impact will, in turn, encourage others to join the Movement that serves and empowers children and youth.

2.3 Conclusion Child and Youth Finance International has taken special care to ensure that this publication has the most complete overview of the state of the Movement as it currently stands. That said, we recognize that it is incomplete. As the document progresses, we will review and further refine both surveys to be able to capture as much information about programs and products and the general state of the Movement as is possible. Through this refinement process we will be able to better gauge the progression of the Movement and where we stand in terms of supporting our Theory of Change, which will be further outlined in the next chapter.

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Chapter 3

Addressing Children & Youth’s Financial Realities through the Theory of Change

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Chapter 3

Addressing Children & Youth’s Financial Realities through the Theory of Change This section of Children, Youth & Finance focuses on the ramifications of poverty as well as other pressing issues affecting the world’s children and youth. It goes on to present Child and Youth Finance’s approach towards financial inclusion and holistic financial education as two measures that can tackle these issues and improve the present and future lives of young people. These are outlined in the Child and Youth Finance Movement’s Theory of Change and explored by the Movement’s Research Working Group.

3.1 Financial Adversities Confronting Children and Youth Today: A Lost Generation in the Making According to the Council of Europe’s Committee on Social Affairs, Health and Sustainable Development, today’s children and youth are said to be in danger of becoming the “lost generation” whose rights and well-being are at stake.

This is attributed to the “unemployment, underemployment, socio-economic inequalities, poverty and exclusion [which] disproportionally affect the young generation”.11

Child and Youth Finance International builds its foundation upon the work of organizations which have long listened to the plights of youngsters. It stems from the need for prevention: delving into the root causes of the hardships related by children. One such organization is Child Helpline International (CHI), a global network of child helplines working in 131 countries. Through the 13.7 12 million calls they have received, Child Helpline International has worked with children to address issues related to abuse, exploitation, health problems, inability to continue with education, etc.

CHI is interested in identifying the root causes of these problems. After conducting its own analysis over the years, it become clear to CHI that the issues faced by children were often rooted in their family’s financial struggles. Poverty – exacerbated by pervasive debt and the inability to earn an income – was central among these. In 2009, as the financial crisis was beginning to rear its head, child helplines recorded an increased number of calls from children requesting financial aid, funding for schools fees and food aid. Seventeen percent (17%) of children requested employment opportunities and 19% sought shelter. At the end of 2008, when the first effects of the financial crisis became apparent, 52% of calls under the category of “Basic Needs” related to requests for Resources and Finance Aid.13

Luca Volonte, The young generation sacrificed: social, economic, and political implications of the financial crisis, Committee on Social Affairs, Health and Sustainable Development, Council of Europe Parliamentary Assembly, Doc 12951, 08 June 2012.

12 Connecting to Children, 9th ed. (Amsterdam: Child Helpline International, 2012).

13 Connecting to Children, 8th ed. (Amsterdam: Child Helpline International, 2009).

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• The financial issues of children and youth are important factors in deter­ mining their personal well-being, the realization of their rights and for their contribution to healthy and stable financial systems.

• Global youth unemployment stands at 12.6%. Some countries face unemploy­ment levels as high as 46.6% • Children in poverty and debt are five times more likely to drop out of school – a factor which will worsen their quality of life and long-term earning prospects.

• 1 billion of the world’s children live in poverty. Repercussions of poverty are decreased education and healthcare and increased instances of homelessness and abuse.

• The CYFI Theory of Change is based on research and experience. It outlines the Child and Youth Finance Movement’s theory for the creation of Economic Citizenship in youngsters – a key driver to addressing the financial issues for children and youth.

• The financial systems must encourage and facilitate the provision of all necessary elements in order for children to enjoy reach Economic Citizenship.

Clearly, there is a systematic problem which is affecting children and youth across the world which must be addressed. As will be explored in this chapter, the Child and Youth Finance Movement’s Theory of Change offers financial inclusion and holistic financial education as key components to developing the key capabilities in young people to help them address these adverse financial realities.

It is crucial to invest in developing the capabilities of today’s young people. The prospect of creating a “lost generation” is a bleak one– both for individuals and for future economies. In the next section, we explore some of the most pertinent financial issues affecting youth, and examine their repercussions.

14

‘…with the minimal salary it is impossible to live normally, because you even cannot afford to rent a flat; maybe it is enough to rent a room, but a person needs to buy food, clothes, etc. And you cannot afford a child, to make a family. That’s why many people aged 18-25 leave our country. …I want to live like a person.’

Joseph, Latvia, 24 years old 14

World Youth Report 2011 (New York: United Nations Department of Economic and Social Affairs), 2011).

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3.1.1 High Unemployment: A Reality Harming Youth

Many of the worries of children and youth today are linked to their inability to find employment. Almost no country has escaped the disheartening youth unemployment rates. The International Labor Office calculates a 12.6% global youth unemployment rate (compared to 4.8% among adults).15 In developing countries, youth unemployment is currently a major concern, but they are not the only countries in dire straits. The current youth unemployment rate in the Eurozone stands at 20.8 %, with some countries reaching levels as high as 46.4% (in Spain) and 44.4% (in Greece).

Similarly, rates of unemployment are high in economically underdeveloped regions. For example, the youth unemployment rate is 26.5% in the Middle East, 27.9% in North Africa in 2011, and 17.6% in Central & South-Eastern Europe (non-EU) & CIS.16 The financial crisis is worsening the unemployment problem. During a financial crisis, youth are among the most vulnerable - the “last in” and the “first out”: the last to be hired, and the first to be dismissed,17 usually due to their lack of work experience. The repercussions of unemployment on youth and their families are significant.

This global trend affects children and youth in an adverse manner. Youth who are unable to find employment are vulnerable to criminal activity, mental health issues, alcohol and drug abuse, and poverty18. With their heightened need to earn an income, their risk of becoming exploited increases significantly. It therefore becomes all the more important to aid youth in developing the necessary skills and knowledge to be able to combat this global problem.

This global trend can be traced to the capabilities at a personal level. Individuals who lack basic education, job experience, and employable skills face a bleak job search made all the more challenging in the current global job market. According to Manpower Group’s 2012 Talent Shortage Survey, 33% of employers claim that applicants lack technical competencies (hard skills), 24% state that applicants lack pertinent job experience, and 18% of employers state that the available labor force lacks employability skills (soft skills).19

It is critical to provide today’s youth with an education that will allow them to build the necessary capabilities to find employment or create their own employment through the starting and running of enterprises.

3.1.2 Debt: A Danger for Youngsters and Their Families

The high level of debt experienced by households and individuals worldwide is inextricably linked to unemployment.

While it is easy to jump to the conculusion that debt is likely the problem of low-income households, the reality is much more varied. In high-income households, debt levels have increased significantly. Eighteen (18) OECD countries studied from 1980 and 2010 show that household debt as a percentage of GDP has been increasing most rapidly and reached their highest levels in Denmark (1.53%), the Netherlands (1.30%), and Australia (1.14%) by the end of 2010.21 (Please refer to Figure 3.1) Similar trends in household indebtedness can be found in emerging economies such as Malaysia, where household debt has risen between 7-27% annually throughout the last decade.22 According to an analysis by the IMF, household debt in a sample of 12 countries including Korea, Japan, and China grew by an average 15% per year between 2002 and 2006.23 Overly rapid expansion of household debt tends to impair asset quality and worsen the credit quality of household borrowing.24

‘…young graduates coming out of university or college are eager to enter the workforce, [but have] concerns of paying off their debts may force them to take on jobs that are either outside of their field or do not pay as much as they should.’

Rachelle, 23, from Canada 20

Theo Sparreboom, Global Employment Trends for Youth 2012 (Geneve: International Labor Office, 2012).

Ibid. p. 12 17 World Youth Report 2011 (New York: United Nations Department of Economic and Social Affairs, 2011), 16.

18 Ibid 19 Break the Cycle and Complacency Cycle: Get Ahead of the Global Talent Shortage, Manpower 2012 Talent Shortage Survey (Milwaukee: Manpower Group, 2012), 5.

20 World Youth Report 2012 (New York: United Nations Department of Economic and Social Affairs, 2012).

21 Stephen S. Cecchetti, M.S. Mohanty, and Fabrizio Zampoli, The Real Effects of Debt (Basel: Bank for International Settlements, 2011).

15 16

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For the youth themselves, overwhelming debt is a day-today reality. In recent years, the financial burdens of children and youth have become heavier due to the accumulation of personal debt. While there are very few reported figures on levels of debt for children in developing countries, the few studies on developing economies offer insight into the current state of affairs. In Australia, NSW Office of Fair Trading research from 2003 estimated that 10% of people under the age of 18 years had experienced difficulties with financial debt.25 Of the 616 young Australian people surveyed, 26% were in debt at the time of the survey while 36% had been in debt in the past.26

What is put at stake by these numbers? When the burden of debt repayment grows, it can take priority over savings, exposing children and youth to financially unstable environments that jeopardize their well-being, education, and future prospects. In the United States, 7.2% of students drop of out college due to debt and/or financial pressures.27 University administrators state that they lose more students to credit card debt than to academic failure.28

Figure 3.1 Household Debt in 18 OECD Countries 1980-2010 1.80

Household debt (percentage of GDP)

1.60

US Japan Germany Great Britain France Italy Canada Australia Austria Belgium Denmark Finland Greece Netherlands Norway Portugal Spain Sweden

1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Source: Data set from Stephen S. Cecchetti, M S Mohanty and Fabrizio Zampoli, The Real Effects of Debt, BIS Working Papers No. 352, Monetary and Economic Department, September 2011

Norhana Endut and Toh Geok Hua, Household Debt in Malaysia BIS Papers no. 46 (Basel: Bank For International Settlements, 2009).

Lee, Seong-Tae, Household Debt – Implications for Monetary Policy and Financial Stability Opening Address (speech, Seoul, South Korea, March 28, 2008).

24 Ibid.

25 Paul Vittles and others, Young People (12 - 17 Years) & Financial Debt, Canberra: National Affairs Research Scheme, 2008) 26 Ibid.

27 Student Credit and Debt Statistics, Credit.com: http://www.credit.com/press/statistics/student-credit-and-debt-statistics.html (accessed July 19, 2012).

28 Facts and Statistics, The Greater Baton Rouge Literacy Committee (accessed July 19, 2012).

22 23

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Rubina is 14. Her father can no longer work due to a heart attack and her brother is paralyzed due to a road accident. Rubina and her mother are forced to provide for their family of 10. They live in a slum with 90 other people. It has four cooking burners, one toilet and one bathroom.

Rubina received training through BRAC’s Star Program and is now earning her own income. She is saving money in a bank account in order to fulfill her dream of owning a tailor shop. She has already started helping her family, and a part of the stipend is deposited into the bank as savings. She is happy to have found a way to ease her family’s pressure in the near future with her newfound skills. Her parents are also hopeful. They said, “There would be no poor people if these kinds of opportunities are made available to all.”

(Skills Training for Advancing Resources (STAR) is a new initiative taken by the BRAC Education Program to provide adolescent girls and boys with Technical and Vocational Education and Training. The aim of this intervention is to improve the chances of vulnerable adolescents for achieving decent employment in the future.

The model involves providing enterprise-based on-the-job training to the adolescents in the informal market. In parallel, it also offers theoretical and soft-skills development training.)

Great efforts by key decision-makers at the national and international levels must be undertaken to raise awareness among children and youth about the consequences of debt. Such awareness can be developed through financial education and the promotion of healthy savings habits for every child. In so doing, it becomes possible to lower the susceptibility of children and youth to harmful debt, while at the same time educating them about the possible long-term benefits of moderate levels of certain types of debt.

The repercussions of child poverty are far reaching, with a variety of negative trickle down effects. Critically, poverty and its effects impede the basic human rights of children and youth. The UN Convention on the Rights of the Child32 outlines children’s rights to survival, to develop to the fullest, to protection from abuse and exploitation and to participate fully in family, cultural and social life. Yet poverty is often a major barrier for children to practice these rights.

3.1.3 Poverty: The Real Trap

The effect of poverty on a child’s ability to acquire an education is significant. Children and their families must make tough decisions, preventing many children from starting or continuing with their education, as the short-term sacrifices are great. Often, with a child in school, parents may lose invaluable household income earned by the child.

Of course, they may be unable to afford not only tuition, but perhaps also basic school supplies: pen, paper and pencils.

No country, wealthy or poor, is immune to this reality.

Poverty is perhaps the most deeply rooted and widespread problem facing children and youth today. Every 1.2 seconds, a child is born into poverty worldwide.29 There are currently 2.2 billion children living across the globe.30 600 million of those in developing countries live in poverty.31

Samuel Johnson, The Inevitable Consequence of Poverty Is Dependence, n.p.: Poverty Program, n.d.)

State of the World’s Children 2012 (New York: UNICEF, 2012).

31 Millenium Development Goals, UNICEF: http://www.unicef.org/mdg/poverty.html (accessed 18 July).

32 UN Convention on the Rights of the Child Article 29 (New York: United Nations, 1990).

29 30

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This holds true in both economically developed countries, as well as in economically developing countries. Examples abound in economically developing countries, where 1.9 billion of the world’s children can be found.33 According to a report that found the link between child labor and school attendance in the Journal of Population Economics, 18% of Zambian students who dropped out left school because their families could not afford the tuition.34 At that time, only 51.2% of children aged 7 through 18 were from the lowest wealth index (quartile) and 57.7% from the second lowest wealth index were attending school.35 The report concludes that even when children and youth have access to education, poverty often force them to enter the workforce in place of going to schools.36 Unfortunately, countries within similar GDP brackets levels show the same trends.37

crime, and ill health.41 Indeed, the effects of poverty extend beyond a negative impact on education to affect nutrition, healthcare and safety. It is “damaging to children’s development in every way – mental, physical, emotional and spiritual.”42 To tackle poverty-related issues, which lead to high unemployment and low education, it is in the interest of all pillars of society to provide individuals with the knowledge, tools and opportunities to escape poverty. Poverty, fundamentally an issue of financial resources, requires an ability to understand and experience basic finance. In the following section, we will outline the Theory of Change for the development of financial knowledge and skills for every child and youth.

‘Poverty [is] fundamentally an issue of financial resources and requires an ability to understand and experience basic finance.’

Wealthy countries are also susceptible to the challenges of poverty. Similar effects can be seen in more developed economies, UNICEF’s Innocenti Report Card 10, states that 35 million children in developed economies across 35 countries live in poverty.38 In the United States, 3.4 % of students enrolled in public and private high schools dropped out before the end of the 2008-2009 school year.39 Students from low-income families dropped out of high school five times more than those from high-income families in 2009.40 “Drop out factories”, a term coined to describe schools that graduate 60% or less of their student body, are located in poverty-stricken areas with high rates of unemployment,

State of the World’s Children 2012 (New York: UNICEF, 2012).

Peter Jensen and Helena Skyt Neilson, Child Labour or School Attendance? Evidence from Zambia, Journal of Population Economics 10, no. 4 (1997): 407-424.

35 Zambia DHS EdData Survey 2002 ORC Macro (2003): http://www.zamstats.gov.zm/media/zdes.pdf (accessed July 19, 2012) 36 Peter Jensen and Helena Skyt Neilson, Child Labour or School Attendance? Evidence from Zambia, Journal of Population Economics 10, no. 4 (1997): 407-424.

37 Friedrich Huebler, Child labor and school attendance: Evidence from MICS and DHS surveys (Madrid: UNICEF, 2008).

38 Tens of Millions of Children Living in Poverty in the World’s Richest Countries (Brussels: UNICEF, 2012).

39 Facing the School Dropout Dilemma. American Psychological Association, 2012: http://www.apa.org/pi/families/resources/school-dropout-prevention.pdf (accessed July 19, 2012).

40 Ibid.

41 Facing the School Dropout Dilemma. American Psychological Association, 2012: http://www.apa.org/pi/families/resources/school-dropout-prevention.pdf (accessed July 19, 2012).

42 Millenium Development Goals, UNICEF: www.unicef.org/mdg/poverty.html (accessed 18 July).

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3.2 Building the financial knowledge, skills and opportunities for children and youth In light of the consequences stemming from a lack of financial knowledge among today’s children and youth, we must identify the roots of the problem, relevant leading causes and influences and, more importantly, we must provide feasible solutions.

This is no easy task. There exist a wide number of theories and possible approaches towards tackling these issues.

All have their merits and many are founded on undeniably strong arguments. The approach that is taken by the Child and Youth Finance Movement, however, is one which has not been the focus of other organizations or bodies to date.

The Movement’s approach draws from the experiences of organizations working in the field of children’s right and empowerment. It is a values-based system which draws upon the voices of children through the calls received by child helplines and reports from these civil society organizations.

The Child and Youth Finance Movement’s theory is that a combination of financial inclusion and holistic financial education is crucial to developing the Economic Citizenship of children and youth. The Movement further maintains that to strengthen the impact and the reach of these, the necessary legal and regulatory systems must be put in place to facilitate the process. For the Movement, Economic citizenship means: • Reduction of income and asset poverty.

• Increase of economic and social engagement.

• Development of sustainable livelihoods.

• Augmentation of economic and social well-being.

• Recognition of rights and responsibilities to self, family and others.

Today, this approach is the central focus of the leading academics who make up the CYFI Research Working Group.

This Working Group was consulted to craft its Theory of Change.43

3.2.1 The Child and Youth Finance Movement Theory of Change

The academics of the CYFI Research Working Group have combined their expertise with existing research to develop the Theory of Change (Reference: Figure 3.2). The end result consists of two intertwined strategies for building Economic Citizenship in children and youth - financial inclusion and a combination of social, financial and life skills education.

At the center of the Theory of Change lies the ultimate beneficiary, the individual child. All the theories and potential outcomes explored and developed throughout the surrounding ecosystem are designed with the well-being of the child as central, and with Economic Citizenship as the desired outcome.

While developing the CYFI Theory of Change, the Research Working Group used as its base the UN Convention on the Rights of the Child. The Convention outlines children’s right • to survival, • to developing to the fullest, • to protection from harmful influences, abuse and exploitation, and • to participate fully in family, cultural and social life.

States’ parties to the Convention immediately recognized that poverty and unemployment severely restrict, if not completely deny, children and youth these fundamental rights. In order to reach the goal of economic citizenry, the group concluded that a concentrated effort of intertwined development interventions is necessary. The Theory states that holistic financial, social and livelihoods education can, when provided in concert with financial inclusion, lead to greater capability and empowerment, thus helping children and youth to become thriving economic citizens.

Each aspect of the Theory of Change is deeply rooted in social, behavioral or economic theory. The notion that education plus inclusion creates greater financial capability finds its base in the Capabilities Theory put forth by the philosophers Amartya Sen and Martha Nussbaum.

According to Sen, capabilities are notions of freedom in the positive sense: what real opportunities you have

Child and Youth Finance International, Children and Youth as Economic Citizens: Review of Research on Financial Capability, Financial Inclusion and Financial Education, Research Working Group Report (Amsterdam: CYFI, 2012), 9.

43

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Figure 3.2 Theory of Change Model of Economic Citizenship Economic Citizenship

Economic Citizenship

- Reduced income poverty & asset poverty - Economic & social engagement - Sustainable livelihoods - Economic & social well-being - Rights for & responsibilities to self, family and others

Financial Capability

Empowerment

Financial Education

Social Education

Financial Inclusion

SURROUNDING ECOSYSTEM Source: White Paper Committee, CYFI Research Working Group, February 9-10, 2012

regarding the life you may lead. Nussbaum, who applies this theory to human development and welfare, believes that capability takes into account people’s internal capabilities (e.g. knowledge, skills and abilities) but also the external conditions and arrays of opportunities available (e.g. access to products, services and institutions) which together make up their combined capabilities. People may possess certain internal capabilities, but external capabilities must also be in place in order for people to be truly capable and vice versa. Both of these together are needed for people to function. Informed financial decisions are based on a person’s knowledge, ability and skills but also based on what is possible in their circumstances.

Within this context of capability, CYFI’s focus on children and youth is based in the development theory put forth byacademics such as Baltes, Zastrow and Kirst-Ashman.

Development theory posits that growth and change is a lifelong process, and that people have the never-ending ability to change and grow. However, the ability of children and youth to develop financial knowledge and skills is affected by their cognitive and social abilities at different development stages. Children can understand various financial concepts at a very young age, perhaps as early as four years of age, and can grasp basic economic concepts during the primary grades, as seen in the work of SomugaBarke and Webley and Sosin, Dick & Reiser. These concepts form the foundation of a more complex understanding as

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children mature. CYFI’s insistence on early learning is also informed by the work of Mandell who found that financial education when administered to adults is much less effective in behavioral change than when it is administered to children and youth. When applied to the Theory of Change model, it is expected that greater financial knowledge, skills and abilities should emerge at the individual level.44 Theory of Change Model

Possible self theory as applied by Elliot, Sherraden, Johnson and Guo maintains that children who are brought into a structured, formal savings program are more likely to have higher aspirations about their futures. These children are thus more likely to become active and involved in the economic system, and behave and make choices that will lead to them becoming economic citizens. According to the Theory of Change model, one should expect to see greater entrepreneurship, higher self-confidence and greater future aspirations in children who are taught about financial education.

Having developed the theory of change, the Working Group set out to determine the factors that influence the development of children and youth’s Economic Citizenship.

As a first step, the Working Group conducted research on existing studies to identify any correlations and gaps.

The Working Group found that although the benefits of financial education have ample support at a superficial level, the two complementary components of financial education - livelihoods and life skills education- requires more thorough evaluation. With regards to the development of financial knowledge, the working group emphasized the need for more rigorous research designs that disentangle the varying effects of different combinations of financial inclusion with financial, life skills, and livelihoods education interventions.45 Furthermore, while CYFI believes that successful careers can jumpstart the accumulation of assets and the cultivation of health, work and social relations, too little is known about the effects of the different components of education aimed especially at promoting employability.

Financial inclusion data for children and youth is sparse and difficult to obtain. Raul Hernandez-Coss, Director General for Access to Finance at the National Banking and Securities Commission of Mexico, and member of the Working Group, argues that there is a critical shortcoming of financial inclusion data. He argues that sharper measurement of financial inclusion is necessary for policy reform.46 Although his argument focuses solely on financial inclusion, it applies equally to activities related to financial, social and livelihoods education for children and youth. Both the quality of measurements and the quantity of data hinder proponents of education from realizing goals.

Research on the influence of culture on financial education and access is significantly lacking. Existing data is largely limited to those studies conducted by Anglophone countries.

This geographic imbalance translates into gaps in statistics, and suggests the need for funding in marginalized parts of the world such as South Asia and MENA regions. Only with representation from all regions of the world and layers of society can the Theory of Change Model of Economic Citizenship take global strides.

The analysis of various studies has demonstrated that as a whole, programs that offer education and/or inclusion have made substantial strides in improving outcomes for the beneficiaries of the program. They suggest that both result in positive economic effects, examples of which include higher financial literacy levels and improved financial management skills, as well as higher rates and use of account opening, higher savings deposits and future savings and investing.47 Academics within the CYFI movement agree that there is a need for more research on the effects of child and youth finance education and products on financial capability.

While theory and preliminary evidence from the field suggest that both raise the capabilities of youngsters and set them on the path towards greater long-term positive outcomes, much more research is needed in this area.

This emerging body of knowledge is critical not only to bolster the existing Theory of Change, but also to guide the Movement toward new frontiers.

Ibid, 12-15.

Ibid, 36.

46 Alliance for Financial Inclusion, Measuring Financial Inclusion in Mexico: CNBV’s approach to to obtaining better data for decision-makers, 2011, 2, http://www.afi-global.org/sites/default/files/afi%20case%20study%20mexico_0.pdf, accessed July 19, 2012.

44 45

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3.2.2 Creating a system

Members of the CYFI Research Working Group are unanimous in their conclusion that the necessary systems and policies must be put in place to support the development of the Economic Citizenship of the child.

As issues have repercussions at the micro and macro levels, it becomes important to build the landscape and infrastructures that can support the increase of holistic financial education and financial inclusion. Individuals, households, communities and entire economies are affected.

3.3 Conclusion Financial markets must respond to the growing concerns of children and youth and prevent them from become a lost generation. The individual capabilities of the individual child or youth must be developed in such a way as to maximize their potential as active and responsible economic citizens. The CYFI Movement’s Theory of Change presents the Movement’s strategy for developing these capabilities at the individual level. The Theory stresses that financial systems must create the environment and undertake the necessary initiatives to develop this generation in a way that benefits them as individuals and their communities.

In the next chapter, we will examine the trend and gaps in the current financial systems insofar as they support the financial inclusion and financial education of children and youth.

Child and Youth Finance International, Children and Youth as Economic Citizens: Review of Research on Financial Capability, Financial Inclusion and Financial Education, Research Working Group Report (Amsterdam: CYFI, 2012).

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Chapter 4

Exploring the System: Where does it currently stand?

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Chapter 4

Exploring the System: Where does it currently stand?

Having outlined the importance of developing the financial capabilities of children and youth, it becomes important to examine to what extent the current system supports or hinders this effort. To what levels is the current system supporting financial inclusion and holistic financial education? In what areas is it failing? In engaging in this exercise, it becomes clear where efforts are strong and where gaps can be found. These will be analyzed within the current global context, and potential areas of improvement will be identified. This provides the baseline and an understanding of the landscape in which the Child and Finance Movement will be operating and set the course for its growth.

4.1 Child and Youth Financial Inclusion and Education in Need of Attention 4.1.1 Financial Education

Financial education is key to the development of an individual’s financial knowledge and capabilities, as it is a key agent against poverty and financial vulnerability. In its document Improving Financial Literacy, the OECD, argues that in the modern globalize world, the absence of financial education among individuals and households makes them more prone to over-indebtedness and bankruptcy.48 Amartya Sen’s research has supported this claim through detailed investigation of family structures. His findings have proven that inefficient capabilities at the individual and community

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level are at the core of persistent poverty in many parts of the world.49 Yet according to Mike Kubzansky Monitor, of the roughly 500-800 million people worldwide who have some form of access to formal financial services, only 25% have had even the most basic financial education.50 The lowest financial literacy rates are in developing countries such as Pakistan, Indonesia, Vietnam, and South Africa, in which children and youth make up 27.3%, 17.7%, 31.8%, and 34.0% of population respectively51 Although this and other empirical research identify financial education coupled with financial inclusion as a possible solution to global financial issues, children and youth still lack the resources to practice personal finance and gain financial education essential for their future well-being.

On a global level, it is interesting to see what policies are in place in different countries. The present state of affairs is grim. The OECD’s International Gateway for Financial Education (IGFE) reveals that there are only two government-run financial education programs in South Asia while there are 61 programs in Europe and Central Asia combined. (See Figure 4.1)52 The limitations of data mean that we cannot yet identify the numbers of children being reached by existing government programs. There are, however, a number of non-governmental organizations and similar institutions planning financial education programs. In an effort to gain some data on the extent of financial education through these programs, they too were asked to complete the CYFI Education survey.

Improving Financial Literacy: Analysis of Issues and Policies (Paris: OECD, n.d.).

Sen Amartya, Human Rights and Capabilities, Journal of Human Development 6, no. 2 (July 2005): http://www/ unicef.org/socialpolicy/files/Human_Rights_ and_Capabilities.pdf (accessed July 19, 2012).

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4. Exploring the System: Where does it currently stand?

• Children, Youth & Finance compiles research and data from secondary resources, the Child and Youth Finance International Research Working Group, and surveys conducted by the CYFI Secretariat.

• The secondary resources provide key statistics that illustrate the global issues confronting children and youth today.

• The CYFI Research Working Group’s literature review gathered the findings of numerous academic experts in the limited field of financial inclusion and financial education for children and youth.

• The CYFI Education Survey and Banking Survey analyzed the programs of current CYFI partners and measured their progress.

• The limitations of the data include a lack of sharp impact measurements, a lack oforganizations offering a combination of child savings and financial, social, and livelihoods education, a shortage of monitoring, evaluation and impact evaluation systems, and the small CYFI survey sample size.

Figure 4.1 Number of Government-Run Child and Youth Finance Education Programs 70 Number of Programs

60 50 40 30 20 10 0

The Americas

East-Asia & Pacific

Europe & Central Asia

Middle-East & North Africa

South Asia

SubSaharan Africa

Region Total Number of Government-Run Financial Education Programs

In Primary School

In Secondary School

Source: OECD International Gateway for Financial Inclusion

Kubzansky Monitor, Mike, Approaches to Promote Financial Literacy, report no. Si-3. “ International Financial Literacy Barometer 2012”, Visa: http://www.practicalmoneyskills.com/resources/pdfs/FL_Barometer_Final.pdf (accessed July 19, 2012).

52 OECD Gateway for Financial Education, http://www.financial-education.org (accessed July 19, 2012).

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Responses were received from 31 NGOs, sharing information about 41 programs. This data revealed that nearly 19 million children and youth are being reached with financial education programs - less than 1% of all children and youth. This figure further highlights the crucial gap in the global efforts by financial systems’ to develop the financial capabilities of children and youth. Greater efforts, coordination and synergy must take place to achieve a level of outreach that will create a significant impact.

This Child and Youth Finance Movement is confident that the cooperation it is forming among governments, NGOs, multilateral institutions and many more will be instrumental in bringing about this positive change.

For existing programs, we sought to discover how they matched against the components laid out by the Child and Youth Finance Education learning framework – namely, social, financial and livelihoods education.53 CYFI’s findings show that existing financial education programs mainly focus on financial education. Figure 4.2 demonstrates that, among the programs that do exist, 68% offer financial education while only 52% offer a livelihoods component, 55% offer life skills, and 31% offer a savings component in their curriculums. More strikingly, there is currently

no education program with an all-encompassing CYFI Learning Curriculum (all elements of financial, life skills and livelihoods education with a savings component, as represented in Annex 2). CYFI believes that all three components of education must be present to not only enrich knowledge, but also to cultivate an internal motivation for positive financial behavior.

In keeping with the Movement’s philosophy that financial education should be coupled with a practical experience of money, we also looked into which of these programs included a savings component. The modest number of savings programs explains the low savings rates among children and youth enrolled in financial education programs.

The CYFI Education Survey demonstrates that of the 18 million children who are enrolled in CYFI educational partners’ programs, only a meager 8% are saving either formally or non-formally. (Reference: Figure 4.8) This demonstrates a need to incorporate savings components into financial education programs to cultivate early savings habits of children and youth.

Social/Life Skills Education

Financial Education

Livelihoods Education

Emotions, consequences, health, compassion

Money, price, savings, belongings

Children’s Rights, responsibility, rules, listening

Needs and wants, savings plan, rewards, banks and financial services

Career interest, professions, entrepreneurship, goals, initiative, problem solving skills, teamwork, taking advice, avoid hazards

Level 3: 10-14 years

Express opinions, teamwork, research skills, appreciation for life-long learning

Informed consumer, short vs. long term, financial risk, effects of advertising

Vocations, opportunities, action plan, self-discipline, perseverance

Level 4: 15+ years

Social justice, time management, relationships, leadership

Negotiation, purchasing power, interest rates, financial crimes

Wages, capital, marketing, CVs, cope with change, management

Level 1: 0-5 years

Level 2: 6-9 years

An Introduction to Child and Youth Finance Education: Developing Quality Financial, Social and Livelihoods Education for Children and Youth (Amsterdam: Child and Youth Finance International, 2012).

53

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The Movement’s Theory of Change emphasizes the link between financial education and holistic financial inclusion.

Where financial education provides the knowledge and understanding of finance, financial inclusion provides the experience of it. Financial inclusion not only provides a safe place to store money, but also access to credit, fixed deposits, insurance, remittances, and transfers for children and youth at various points in their development.54 The Child and Youth Finance Movement places a special focus on the provision of financial inclusion through formal savings, particularly as a means for cultivating savings behavior. Having a safe place to build assets can spawn socioeconomic advancement for millions of children, their families and entire communities. From a global perspective, expanded banking services can stimulate business growth and reduce household poverty. Child and Youth Friendly savings products, policies, and programs encourage young people to enter formal financial systems and carry these early experiences into adulthood.

4. Exploring the System: Where does it currently stand?

4.1.2 Financial Inclusion

Furthering financial inclusion through savings accounts has a host of positive outcomes for children and youth. The CYFI Research Working Group determined these outcomes to include economic well-being (income, savings), health (including reproductive and sexual health), mental health, academic achievement and educational attainment, and expectations for the future. Despite these initial findings of association, more research is needed, especially experimental research that assesses impacts of financial inclusion of children and youth.

To better understand the levels of financial inclusion afforded to children and youth across the world, we turned to World Bank Statistics to shed some light on this matter.

This data shows that only 37.9% of youth and adults aged 15 – 25 have accounts at formal financial institutions. A country breakdown was also reviewed and visualized on a map in Figure 4.6. When compared to statistics on the percentages of youth population, it becomes strikingly clear that nations with the youngest demographic have the greatest scarcity of bank accounts for young people.

This highlights the global trend of a lack of financial access for youth. This inverse correlation exists because children

Percentage of Programs with Component

Figure 4.2 Components of Child and Youth Finance Education Programs % 70 60

68%

50

52%

40

55%

30

31%

20 10 0 Financial Education

Livelihoods Education

Life Skills

Savings Program

Components of Child and Youth Finance Education Programs Source: CYFI Education Survey 2011

54

Alice Lubwama and K.M.D.B. Rekogama, Institutionalizing Youth Financial Services to Achieve Scale (Washington, DC: SEEP Network, 2011).

Children, Youth & Finance

41

Figure 4.3 Percent of Population Under Age 14

13-19

19-25

25-38

38-45

45-60

No data

45-60

No data

Source: World Bank 2012

Figure 4.4 Percent of Population Between Age 15-25

13-19

19-25

Source: World Bank 2012

42

Children, Youth & Finance

25-38

38-45

4. Exploring the System: Where does it currently stand?

Figure 4.5 Percent of Population Under Age 18

2.5-19

19-25

25-38

38-45

45-60

No data

Source:UNSTAT 2012

Figure 4.6 Percent of 15-25 Year Old Banked*

0-12

12-26

Source:World Bank 2012

26-65

65-100

No data

* possess formal bank accounts

Children, Youth & Finance

43

Figure 4.7 Percentage of Population Saving & Percentage of Population with Formal Bank Accounts Classified by Income (GNI*) % 70 60

Percent

50

57%

40

43%

30 20

30%

24%

31%

34%

10 0 Low Income

Middle Income

Upper middle income

Income Level

Percentage saving

Percentage with formal bank accounts

*GNI: Gross National Income Source: World Bank (2012), The Little Data Book on Financial Inclusion

and youth – a large proportion of the population – do not have access to formal financial services. The stark contrast between the immense youth population and the low levels of access for children and youth reveals a large gap in the provision of financial access to a large portion of the population into the formal financial sector and spurring economic activity.

Savings rates in developed countries have been on a steady decline: in Japan, savings have fallen from 40% of GDP in 1970 to 25% of GDP in 2007. In the United States, the savings rate was at its zenith during the 1980s at 21% of GDP and at its nadir in 2007 at 13% of GDP.56 In contrast, the savings rates in emerging Asia and in the Organization of Oil-Exporting Countries have experienced growth.57

How do the gaps in financial inclusion affect children’s savings habits? Almost no empirical data exists on the level of savings for children and youth. However, a glance at global patterns may reveal a clue. In developed nations, 81% of adults are estimated to be banked while only 28% in developing countries are banked.55

Is the lack of financial inclusion to blame for these low rates of savings? Interestingly, patterns show that solely increasing financial inclusion will not necessarily cultivate habitual savings behavior. (Reference: Figures 4.6, 4.7) For instance, although 43% and 57% of citizens of high- income countries and middle-income countries (developed and developing), respectively, hold formal bank accounts, only 31% are actively using the bank accounts and depositing money on a regular basis. By contrast, 30% of citizens in low-income countries are saving while only 24% have formal bank accounts. Others that save in low GNI countries

Despite the higher percentage in developed economies, banked populations in wealthier nations are not saving regularly. Leading research has shown that the levels of gross savings have continuously dropped since 1970.

Jake Kendall, Nataliya Mylenko and Alejandro Ponce, Measuring Financial Access around the World (Washington D.C.: The World Bank, 2010).

Bridgitte Desroches and Michael Francis, Global Savings, Investment, and World Real Interest Rates (Ottowa: Bank of Canada, 2006-2007).

57 Ibid.

55 56

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4. Exploring the System: Where does it currently stand?

Figure 4.8

Not Saving 92%

Saving 8%

Saving Formally 2% Saving Non-formally 6%

Source:CYFI Education Survey 2012

are saving non-formally.58 This illustrates that despite the scarcity of formal bank accounts, a larger percentage of low-income countries are saving regularly. This means that national governments must build financial capabilities so that people on the ground level can effectively manage their personal finances. On the other hand, although wealthier nations boast more widespread availability of formal accounts, account holders do not seem to use them to maximum capacity.

These patterns reinforce the CYFI Movement’s theory that financial inclusion and holistic financial education must continue to be intertwined to achieve the desired levels of financial capability.

That same link between financial inclusion and financial education was assessed in the Education Survey. As shown earlier, only 8% of students enrolled in an education

program were actively saving. Of the 8%, merely 2% save in formal bank accounts offered by commercial banks.

Six percent (6%) save informally in their piggy banks at home, with their parents, or deposit centers in classrooms or after-school programs.59 A breakdown of this 8% illustrates there is still much room to integrate savings programs with access to formal savings products.

An interesting insight as to why there is a low level of financial inclusion for children and youth can be examined from the supply side. Despite the market opportunity of targeting younger clients to acquire life-long clients and customer loyalty, several barriers hinder the supply of child-specific banking products. The CYFI Bank Survey reveals that only one bank had a comprehensive financial access policy for children and youth while others mostly offer simple savings accounts.60 According to the CYFI banking survey, financial service providers indicated that there were a number of barriers preventing the provision of

The Little Data Book on Financial Inclusion, World Bank, 2012, http://data.worldbank.org/products/data-books/little-data-book-on-financial-inclusion.

CYFI Education Survey (Amsterdam: Child and Youth Finance International, 2011).

60 Ibid.

58 59

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45

Figure 4.9 Barriers to Providing Financial Products and Services Friendly to Children Regulatory and Legal Barriers

21%

Non Profitable to Offer Financial Products and Services to Children

9% 51%

8% 11%

Lack of Organizational Interest Other Barriers No Identified Barriers

Source: CYFI Banking Survey 2011

savings products for children and youth. The most frequently identified barrier, according to partnering banks, is the existing regulatory environment (51%), incongruence of their strategic agendas and focus on children and youth (21%), and financial support (11%). (Reference: Figure 4.9)

distribution such as mobile banking, financial institutions can increase the number of financial offerings because of lowered costs. With a simple change in service, banks can reach out to a larger number of children and youth, particularly in remote areas.

Annex 5 provides an overview created by Clifford Chance on the legal framework for the provision of financial products and services for children and youth in 34 countries.

The findings from the CYFI Education Survey and Banking Survey reveal a shortage of financial products and financial education programs for children and youth. The organizations that do serve children are neither engaged in collaborations, nor offer comprehensive programs that most effectively strengthen the financial capabilities of young people. Collaborative efforts among FSP’s and educational leaders, guided by the Movement, and supported by government agencies will bridge the financial education and access gap for children and youth.

Financial services providers have forgone the business opportunity of serving children and youth. Why? Because they faced challenges in both the regulatory environment and in the increasingly complex and competitive banking industry. According to our survey, it was clear that financial products were accessible mostly through physical branches. The lack of commercial banks in areas with poor infrastructure poses a major obstacle to the financial inclusion of children and youth. This is because the vast majority of unbanked and impoverished young people live in rural areas where there are no physical branches within walking distance. By investing in alternative channels of

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Children, Youth & Finance

4. Exploring the System: Where does it currently stand?

Figure 4.10 Most Common Distribution Channels of Banking

Services

25 20

22

20

18

17

15

13

10

12

10 6

5

2

0 Branches and customer suites

Person to ATMs person

Online banking

Telephone POS banking

Mobile banking

Post office

Other

Number of responses received * 120 responses were received as respondents were able to choose multiple distribution channels Source:CYFI Education Survey (CYFI, 2011)

Child and Youth Friendly Banking Products A Child and Youth Friendly Banking Product is one which adheres to the following criteria (insofar as they fall within the scope of national law): • Availability and accessibility of Banking Products for children and youth • Maximum control to the child • Positive financial incentive for the child/youth • Reach unbanked children and youth • Employment of child and youth friendly communication strategies • Financial education • Monitoring of child and youth satisfaction • Internal control These criteria were developed by the Child and Youth Finance Inclusion working group made up of over financial regulators from 25 countries. These criteria in assessing the

readiness of products for receipt of Child and Youth Friendly Banking Product Certification. For more information, please refer to the Child and Youth Finance Certification Document

http://www.childfinanceinternational.org/index.php?option=com_mtree&task=att_download&link_id=753&cf_id=200

Children, Youth & Finance

47

4.2 Coordination and Support on the National Level During the 4th High Level Forum on Aid Effectiveness cohosted by the OECD and South Korea, over 3000 delegates issued a joint statement for their endorsement of expanding and enhancing public and private co-operation for broadbased, inclusive and sustainable growth, development, and job creation61. Under the five shared principles to maximize the benefit of coordination and collaboration to support development, the representatives from the public sector were encouraged to promote leadership and political commitment by governments to prepare the groundwork to ensure public and private cooperation, including PPP’s that are demand-driven, balanced, and sustainable.62 This includes effective policy, legal and regulatory frameworks, anchoring such cooperation into national and sector plans and engaging local stakeholders and local communities.63 Such coordination is especially vital under the CYFI framework to ensure that child and youth-friendly policies are created by governments, adopted by private and public organizations, and survive transitions between government administrations.64 Though individual efforts toward children and youth employment exist, there is a lack of cohesiveness in national policies that allow isolated programs to expand their reach and educational scope. As shown earlier in Figure 3.1, government-run financial education programs are scarce, especially in the South Asia and Middle East and North Africa (MENA) regions. Without national policies or even provincial curricula to implement any of the individual components of financial, social or livelihoods education, the holistic Child and Youth Finance Education framework will be difficult to realize.65 Limited government participation in education efforts also results in education programs that may be enriching within the classroom, but lack the practical life skills and livelihoods applications that foster children and youth’s employability in competitive labor markets for talented and skilled workers. Making Cents International cites Manpower Group’s Annual Talent Shortage Survey

of employers, revealing that 89% of companies found the current labor force to lack experience, technical skills, and soft skills. The classroom, employers argued, does not adequately transition a student from academic learning in school to applying their learning to the workplace. Academic education does not meet industry demand for well-trained, adaptable, and practical individuals.66 A critical step to refocus education towards relevancy is to understand the needs of labor markets and recognizing reasons for gaps in unemployed youth and employers unable to find suitable employees.

None of the FSP’s that completed the CYFI Banking Survey have indicated that specific regulations are in place for developing child-friendly products and services in their countries of operation.67 Rather there are policies that enforce age limits or identification requirements initially intended to protect children but later have unintended consequences. For example, Making Cents illustrates a savings product that children may open with IDrequirements to ensure that adults weren’t abusing the system. However, the identification scheme prevented children and youth from accessing financial products and services because most children and youth do not have IDs or birth certificates.68 Other legal restrictions, confirmed by the findings of Clifford Chance, limit children’s access or alienate the youngest clientele. Of the 33 countries studied, 21 countries had a minimum age requirement to open an independent account of 18 or older. 11 nations allow minors (generally 18 and under) to open independent bank accounts with parental consent.69 (Reference Annex 5) Such regulatory restrictions on opening bank accounts leave millions of children and youth unbanked and saving non-formally.

Development Co-operation Directorate (DCD-DAC), comp. Expanding and Enhancing Public and Private Co-operation for Broad-Based, Inclusive and Sustainable Growth: A Joint Statement for Endorsement by Representatives from the Public and the Private Sectors at the Fourth High-Level Forum on Aid Effectiveness.

N.p.: 4th High Level Forum on Aid Effectiveness, 2011. P.1 62 Ibid.

63 Ibid.

64 Making Cents International, 2012 State of the Field in Youth Economic Opportunities: A Guide for Programming, Policymaking, and Partnership Building, Global Youth Economic Opportunities Conference, Washington DC, Untied States, March 2012.

61

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Children, Youth & Finance

4. Exploring the System: Where does it currently stand?

4.3 Conclusion Financial systems are currently falling short of having the impact needed to systematically provide financial inclusion and a holistic financial education to children and youth.

Having assessed the levels of outreach and impact of the current financial systems, the shortcomings of these systems are a key factor in the financial issues facing children and youth (as outlined in chapter 3).

A restructuring of financial systems is necessary to avoid the creation of a “lost generation� and to prevent further economic crises. All actors must work together to redefine policies and activities so that whole generations can benefit from a transparent financial system that supports the development of financial capabilities for all.

Chapter 5 provides further insight regarding work being undertaken by different actors in their efforts to fill existing gaps.

For more information on the proposed framework, please see An Introduction to Child and Youth Finance Education, CYFI, 2012 Making Cents International, 2012 State of the Field in Youth Economic Opportunities: A Guide for Programming, Policymaking, and Partnership Building, Global Youth Economic Opportunities Conference, (Washington DC, Untied States, [March 2012]).

67 Child and Youth Finance International, CYFI Banking Survey, 2011 68 Making Cents International, 2012 State of the Field in Youth Economic Opportunities: A Guide for Programming, Policymaking, and Partnership Building, Global Youth Economic Opportunities Conference, (Washington DC, Untied States, [March 2012]).

69 Child and Youth Finance International Short Report on Clifford Chance Research on Financial Inclusion 65 66

Children, Youth & Finance

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50

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Chapter 5

Early Successes and Innovation in Financial Education and Financial Inclusion

Children, Youth & Finance

51

Chapter 5

Early Successes and Innovation in Financial Education and Financial Inclusion In the last two decades, a number of organizations from various sectors have designed products and programs that build financial capabilities of children and youth. More recently, other organizations have associated early financial education and child savings practice with prudent money management and sustainable livelihoods in adults. Thus, organizations in increasing numbers serve children and youth and give them the knowledge, confidence, and motivation to save towards their long-term goals.

This section illustrates the early successes and innovations that have shaped the beginning of the Movement. Learning from these noteworthy models of financial inclusion and financial education for children and youth, future stakeholders can design their own programs and existing organizations can improve their programs and products. Although multiple CYFI partners have made promising progress, their contribution to the Movement is fairly recent and their efforts must be coordinated on a global platform to gain momentum and scale worldwide.

5.1 Innovation in Pedagogy in Financial, Social, and Livelihoods Education A number of organizations have developed innovative financial education programs that are often offered in conjunction with available financial services to children and youth. Some of these educational programs take a holistic approach and incorporate elements of social and livelihoods education, which build essential life knowledge on health care, children’s rights, gender empowerment

52

Children, Youth & Finance

and entrepreneurship. Organizations especially endorse active learning because hands-on, real-life practice (such as managing savings accounts and entrepreneurship training) firmly ingrains life skills. Educational leaders have created financial literacy curriculums, Economic Citizenship education programs, and innovative teaching methods that have prepared children and youth to earn sustainable livelihoods. Section 4.2 is divided into three subsections to exemplify organizations that only provide one component of the CYFI education framework developed by the CYFI Research Working Groups. The final examples demonstrate how a combination of financial, social, and livelihoods education is the optimal model for building the financial capabilities of children and youth.

5.1.1 Innovation in Financial Education

Organizations worldwide have developed financial literacy curriculums that are introduced and integrated into classrooms and after-school programs. According to CYFI’s Education Survey, 19% of educational programs target children between ages 6 and 9. The main focus is on older children and youth, with 80% of curriculums integrated in primary (age 10 through 14) and secondary (age 15 or older) educational levels. The age breakdown of financial educational programs is shown in Figure 5.1 Although financial education curriculums have been introduced to various grade levels, the focus is on children ages 10 and older. For instance, the Investor Education Fund has created the Taking Stock in Your Future program: six, multi-grade financial literacy curriculums that introduce financial terms, economic concepts, and mechanisms of the global financial markets in Canadian classrooms.70 Developing Financial Sense, a curriculum for grades 4 through 6, introduces financial vocabulary and concepts while building numeracy and literacy skills.71 Taking Stock

5. Early Successes and Innovation in Financial Education and Financial Inclusion

• Notable financial service providers (FSP’s), particularly banks, in developed and developing countries, are providing child savings accounts and complementary services through schools, physical branches, mobile banking, and internet banking.

• Financial education curriculums are introduced in the classrooms or afterschool programs by non-governmental organizations in forms of manuals, internet websites, video simulations, and interactive games.

• Social and livelihoods education offer useful knowledge and practical skills about law, entrepreneurship, goal setting, and money management.

• Few programs combine financial, social, and livelihoods education to empower children and youth to become agents of change.

• Public policy makers, regulators, and ministries are implementing national policies that allow children and youth access to financial services and financial education programs in schools.

Figure 5.1 Educational Programming Offerings by Age Group

19% 1%

40% 40%

I (5 years and under)

III (10-14 years)

II (6-9 years)

IV (15+ years)

in Your Future Intermediate Guide targets those in grades 7 through 10. Taking Stock in Your Future Senior Guide, Fair Play, Financial Skills Guide, and Funny Money Tool Kit – four curricula that are exclusively for grades 9 through 12 and provides a gamut of topics such as cash flow management, investment risk and return, and career exploration.

Similarly, other programs are inserting various financial education components into traditional school curriculums.

Of the 41 programs detailed in the CYFI Education Survey, 27 programs instill savings behavior, short/long-term planning, and budgeting.72 Additionally, frequently taught components of personal finance, such as wise purchasing decision, prices and values, and financial risks, promote savings behaviours. Lastly, curriculums take a macroeconomic approach and introduce students to the operations of financial service providers, taxes and wages, and economic environment. (See Figure 5.2 for further details) Seasoned organizations have provided comprehensive, multi-faceted financial educational programs that have

Figure 5.1 Source: CYFI Education Survey 2011

“Taking Stock in Your Future,” GetSmarterAboutMoney.ca: http://www.getsmarteraboutmoney.ca/en/education-programs/for-teachers/curriculum-tools/ taking-stock-in-your-future/Pages/default.aspx (accessed July 18, 2012).

71 Ibid.

72 CYFI Education Survey (Amsterdam: Child and Youth Finance International, 2011).

70

Children, Youth & Finance

53

As seen in Figure 5.3, approximately 50% of financial education programs use traditional educational materials such as set education curriculums, learning manuals, and teacher training guides to convey a wide range of financial information to students. However, programs are taking creative approaches and introducing innovative technology in order to arouse students’ interest and effectively communicate information. P.A.U. Education, a private corporation that “contribute[s] to increasing, in an ethical manner, the quantitative and qualitative impact of our clients’ social responsibility actions and communication strategies,” has helped BBVA promote financial and citizenship education through a project called Valores de Futuro.76 Created in 2010, the curriculum has implemented participatory workshops, classroom debates, and online resources to stimulate students and help educators effectively teach the value of money. The program has reached 1.9 million participants ages 6 through 14 who have accumulated 20,000 Euros in formal savings and 40,000 Euros in non-formal savings.77

influenced and developed self-sustaining adults and economic citizens. Since 1925, Junior Achievement Worldwide has been a leader in providing financial education programs that targets all grades from preschool all the way through high school covers the wide range of topics in Figure 5.2. For example, the elementary school programs have six sequential themes that help students understand business and economics. Students begin the program by learning about the biography of the volunteers; then continue with the role of individuals in the local economy; interdependent roles of workers in a community; careers and how businesses contribute to a city; spending, sharing, and saving money; relationship between the natural, human, and capital resources found in different regions; practical information about businesses’ need for individuals who can meet the demands of the job market; and finish with globalization of businesses.73 Middle school and high school programs are more sophisticated in language and more extensive in detail, yet cover similar topics. To date, JA Worldwide programs have reached approximately 10.6 million children ages 6 through 18.74 Moreover, JA alumni have become noteworthy adults. The current CEO and President of JA USA started as a student in the Junior Achievement program in Toledo, Ohio and later attended University of Toledo on a Junior Achievement scholarship.75 Figure 5.2 Programs with Components of Financial Education Number of Programs with Offering

30

27

25

27 22

20

22

22

20

19

18

17

15

10

10 5

dW ag

Sk

es

an

cy Ta x

ra me Nu

es

s ill

s iat ot eg

lN cia an

Fin

ic om on Ec

ion

nt on vir

En

eP vic

Fin

an

cia

lS

er

as rch Pu

me

er vid ro

cis De

ing

sa ice

s

s ion

e Va lu nd

lR Pr

an Fin

Pla

nn

ing

an

dB

ud

cia

ge

tti

isk

ng

ur vio ha Be gs

vin Sa

s

0

Components Source: CYFI Education Survey 2011

73 74

54

Elementary School Programs: Overview,” Junior Achievement: http://www.ja.org/programs/programs_elem_overview_obj.shtml (accessed July 18, 2012).

Ibid.

Children, Youth & Finance

5. Early Successes and Innovation in Financial Education and Financial Inclusion

Case Study 1

Financial Education Alters Children and Youth Perception of Savings and Financial Planning Justine Samodio, a sixth grade student, never deposited money in her piggy bank and used her extra pocket money to buy candy. She made no conscious efforts to save. However, after participating in Aflatoun´s financial education program, Justine understands the value of savings. “I now what saving is about - not just money, but other things as well,” says Justine. Now, every penny that goes into Justine’s piggy bank has a purpose: she’ll use it to pay her graduation fees if her mother can’t. And it’s not just saving she’s learned.

“I also learned the importance of planning ahead in order to achieve the best results. I’m able to apply that in school.”

The Canadian Foundation for Economic Education (CFEE) has created the Video Exploration of Careers, Transitions, Opportunities, and Realities (VECTOR) program, an interactive program that provides more than 150 six-minute video vignettes profiling some of Canada’s most-needed careers and occupations.78 Another interactive and hands-on program is Financial Fitness, a collaboration led by Right to Play International and The MasterCard Foundation. Children of age 11 through 17 receive athletic training sessions that incorporate financial literacy and foster youth leadership skills. Implemented from March through May 2010 in Peru and Thailand, the project was projected to reach 1,500 youth participants and taught themes such as budgeting, spending and saving.79

An increasing number of stakeholders of the Child and Youth Finance Movement are incorporating financial education into school curriculums using creative media and ageappropriate teaching methods. Constant exposure to money management, personal finance, and economic concepts reinforces children’s learning and maximizes their application of these skills in their lives.

“Jack E. Kosakowski, President and Chief Executive Officer – Junior Achievement USA,” Junior Achievment: http://www.ja.org/jaworldwide/near/near_worldwide_staff_mgmt.shtml (accessed July 18, 2012).

76 “Project Details: Valores de Futuro,” P.A.U. Education: http://www.paueducation.com/en/projects/valores-de-futuro-el-dinero-en-nuestras-vidas (accessed July 18, 2012).

77 CYFI Education Survey (Amsterdam: Child and Youth Finance International, 2011).

78 “VECTOR: Video Exploration of Careers, Transitions, Opportunities, and Realities,” CFEE: http://www.cfee.org/en/resvector.shtml (accessed July 18, 2012).

79 “MasterCard Worldwide and Right To Play International Collaborate on Financial Literacy,” MasterCard: http://newsroom.mastercard.com/press-releases/ mastercard-worldwide-and-right-to-play-international-collaborate-on-financial-literacy/ (accessed July 18, 2012).

75

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55

Figure 5.3 Service and Product Offering of Partnering Organizations 23

25

23 21

20

19 15

15

15 12

10

10

10 7

5

5

lin

eG

am

me

Cu

rri

cu

On

lop ve De

lum

es

nt

s so Re

ing ch eT ea lin On

Le Te a

ch

er

ce ur

Vi de

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r he Ot

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Bo tiv

ity

Ga

ok

s

e Ac

ta ili

ar

ne

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rF

ch

ac

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tio

in

gM

nG

Gu

uid

ide

ls ua an

cu rri

ar Le

Cu uc Ed

s

0 lum

Number of Programs with Type of Product

30

Type of Product

Source: CYFI Education Survey 2011

5.1.2 Innovation in Social & Life Skills Education and Livelihoods Education

‘I create opportunities for myself instead of looking to others to create those opportunities.’

56

Wen Yunfei, recipient of NFTE’s 2011 Bright China Entrepreneurial Spirit Award (BESA)

Children, Youth & Finance

Financial education cannot stand alone. The goal of the Movement is to empower children and youth so they can apply financial knowledge to their lives, have the confidence and motivation for self-improvement and leadership, and become agents of change in their communities. Thus, Child and Youth Finance education must include a social/ life skills education component, which teaches children and youth self-sufficiency and independence. As shown in Figure 5.4, programs with life skills education heavily focus on promoting self-esteem, gender equality, leadership, and understanding basic human rights. For instance, the Citizenship Foundation in the United Kingdom, established 1989, promotes better understanding of the law and its importance to UK’s democracy so children and youth can effectively partake in society as adults. The Foundation implements three strategic plans: to provide citizenship education (i.e. promote political, legal, and economic literacy); to champion youth’s social engagement through

5. Early Successes and Innovation in Financial Education and Financial Inclusion

Figure 5.4 Programs with Components of Life Skills Education 18

18

17

17

17

16 12

12

11

10

9

8

8 6

4

4 2

en

t

ion

em ag an

Re St

or

es

M

ict Co

nfl

Ne

tw

so

or

lut

kin

alt He sic Ba

al nt me on

En

vir

g

h

n ec ot Pr

ic as gB din an

rst de Un Source: CYFI Education Survey 2011

tio

ts gh Ri

er ad Le

Eq er Ge

nd

sh

lit ua

te Es lfSe

ip

y

0 em

Number of Programs with Offering

14

Components

campaigning, volunteering, and charitable giving; and to promote cohesive and inclusive communities through exploration and debate.80 Livelihoods education illustrates how children and youth can apply social and life skills to earn sustainable livelihoods and venture as entrepreneurs. The Network for Teaching Entrepreneurship (NFTE) in the U.S., established in 1987, provides entrepreneurship education to youths in low-income communities. According to NFTE founder Steve Mariotti, “[NFTE teaches children and youth] how to use markets, to build their communities, to help their families and loved ones, and help themselves. Learning basic business skills at an early age is, in my opinion, the best anti-poverty program of all.”81 In the classrooms, NFTE certified instructors guide students through one the curriculum: Entrepreneurship: Owning Your Future and Exploring Careers for the 21st Century.82 Students learn

how to develop a business plan and acquire essential business skills such as business communications, negotiating, social responsibility, and goal-setting.83 They also explore various career options and steps to attain professional success. Outside the classrooms, students are encouraged to enter in business plan competitions where they can test their business knowledge and learn from other aspiring youth entrepreneurs. The Start Up Summer program helps students 16 and older launch their business through the provision of startup capital, coaching from seasoned entrepreneurs, and other relevant resources.84 Lastly, BizCamps is a 1-2 week long day camp for students ages 13 through 18 that combines NFTE’s classroom curriculums, business plan development workshops, and guest speakers.85 NTFE´s curriculums have been translated and culturally adapted for use in Belgium, China, Chile, Colombia, India, Ireland, Israel, Germany, Netherlands, and New Zealand.86

“Our Work,” Citizenship Foundation: http://www.citizenshipfoundation.org.uk/main/page.php?402 (accessed July 18, 2012).

“Who We Are – An Introduction to NFTE,”, Network for Teaching Entrepreneurship, accessed July 18, 2012, http://www.nfte.com/ 82 “Classroom Programs,” Network for Teaching Entrepreneurship, accessed July 18, 2012, http://www.nfte.com/what/classroom-programs 83 Ibid.

84 “Advanced Programs,” Network for Teaching Entrepreneurship, accessed July 18, 2012, http://www.nfte.com/what/advanced-programs 85 “Bizcamps,” Network for Teaching Entrepreneurship, accessed July 18, 2012, http://www.nfte.com/what/bizcamps 86 CYFI Education Survey (Amsterdam: Child and Youth Finance International, 2011).

80 81

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Case Study 2

Wen Yunfei, a Youth Entrepreneur with Passion for Magic Since the age of 10, Wen Yunfei from China’s Shandong province worried about how his family of farmers would pay for his education. However, through the entrepreneurship courses created by NFTE, Wen learned how to combine his passion for magic with his newly gained business knowledge.

Now 18 years old, Wen is running Magic and Miracle House, his own magic shop where he stages magic performances for special occasions, provides customized magic kits, and teaches tricks to buyers. Wen earns about 2,000 Yuan ($316) a month. A Senior at Shandong’s Yantai Mechanical Engineering school, Wen runs his business on campus and continues to maintain his 3.0 GPA.

Similarly, Street Kids International offers workshops, volunteer training sessions, and youth livelihoods education programs to teach street kids how to support themselves and make healthy, educated decisions that positively impact their lives. Most of these youngsters enter the streets after dropping out from schools and leaving the comforts of their homes to support themselves and their family. In the absence of stability that results from lack of school funds, health issues and natural disasters (among many other unfortunate factors) these marginalized children must develop the knowledge, skills, and social values to build self-sufficiency and independence. The organization’s Street Work Program empowers street children and youth to develop safe and productive ways to earn a living through two trainings: Street Business and Street Banking Toolkits.

Courses such as entrepreneurship and finance build street kids’ business knowledge and money management skills.

Furthermore, children and youth participate in practical,

87

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interactive, and participatory courses culminating in the development of business plans, personal goals, savings strategies and identification of sources of capital. As a result, children and youth in Bolivia, Kenya, Nepal, Poland, Tanzania, Zambia and many other countries worldwide have created businesses and earn sustainable livelihoods.87 Other organizations are offering livelihoods education that goes beyond social and financial entrepreneurship.

Livelihoods education offers a wide range of components that enhance the employability of children and youth once they have decided to enter the job market or create a new market as entrepreneurs. When children have the skills, resources, and motivation to seek stable jobs, they develop a sense of self-awareness and ambitions for selfimprovement that elevate their lives and societies. As a result, the second most common component of livelihood education program is teaching children and youth to

“Streetwork,” Street Kids International: Catalyst for Better Lives, accessed July 18, 2012, http://www.streetkids.org/what_we_do/street_work.php

Children, Youth & Finance

5. Early Successes and Innovation in Financial Education and Financial Inclusion

Figure 5.5 Programs with Components of Livelihoods Education 20 18

18

17

16 15

14

Number of Programs with Offering E sh ntre ip pr (fin en an eu Re cia rs an pon l) d t sib h il En tre e Co ity t mm o S pr en e eu uni lf rsh ty ip Ty (so pe cia so l) fE mp loy Em me plo nt ya bil ity Sk ill s Bu sin es sP lan Sk s ill sA ss es sm en Ca t re er M ap Re pin sp ec g Sa t f fe or ty Et in hic Bu s a Ty sine nd pe ss so fW ag es

16 14 12

13

13

13

12

10 8

9

6 4 2 0

Source: CYFI Education Survey 2011

Components

take responsibly for themselves, their future, and their communities. (See Figure 5.5) Child Fund International works with children and youth throughout their journey from birth to young adulthood to ensure that they have healthy childhoods, stable environments to grow and develop, and education essential for their employability and transition into adulthood. To establish a typical 12-15 year commitment to a child, the organization links sponsors to children who enrol in Child Fund programs that offer knowledge and life skills, trainings to acquire the skills needed to enter the workforce, meet the challenges to grow into adults, and enhance social and leadership skills to become meaningfully involved for the betterment of their communities.88 Although Child Fund offers vocational training and entrepreneurship education, the organization offers various other programs that promote nutrition, emotional health and well-being of children so that they may have the confidence and drive to improve their lives and the lives of others.

5.1.3 Combination of Child Savings Products and Three Educational Components

Although banks offer child savings products and organizations provide financial, social, and livelihoods education, their efforts have been largely independent.

Further progress for the Child and Youth Finance Movement depends on collaborations among stakeholders and creation of all-inclusive programs that follow the CYFI framework.

An organization that has begun a multi-educational component program is the BRAC initiative in Bangladesh.

BRAC has created the SoFEA program (Social and Financial Empowerment of Adolescents), a six-component program that provides a safe place for adolescent girls to meet and receive training on life-skills, livelihoods training, financial literacy training, savings and credit facilities, and community sensitization.89 Through the program, adolescent girls save 5 Tk. (7 cents USD) or above weekly and receive a yearly return of 5% on cumulative savings.90 For a young

“The ChildFund Approach,� ChildFund International, accessed July 18, 2012, http://www.childfund.org/our_approach/ Kashfi Farzana (BRAC), Case Study No. 5: Youth Financial Services: The Case of BRAC & the Adolescent Girls of Bangladesh, Washington DC, United States: Making Cents International, September 2009.

90 Ibid.

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girl, her savings help her pursue further education, lend a hand to her family, and contribute to her married life in the near future.91 A young girl also receives financial, social, and livelihoods education to instill the habit of early savings and prudent money management. She can also learn skills for trade including tailoring, horticulture nursery, vegetable cultivation, and poultry.92 The program not only empowers young women to be independent, which is uncommon among women in Bangladesh, but also combats gender bias against adolescent girls. By August 2009, these girls had cumulatively saved 340 million Tk. (4.15 million USD).93 Aflatoun, a Netherlands-based network of NGOs and other educational institutions around the world, has also engaged in international partnerships to implement its savings and financial education programs. In the Philippines, NATCCO has implemented the Aflatoun concept in partnership with Aflatoun Child Social and Financial Education Organization, local cooperatives, the Cooperative Development Authority (CDA), and the Department of Education (DepEd).94 After the cooperative chose public elementary schools, the Aflatoun curriculum was approved by the DepEd for a nationwide implementation. Once NATCCO conducted the Aflatoun Program Teachers’ Trainings, Aflatoun savings programs were set up while lessons were integrated in the Values/ Character Education and TLE/THE Subjects.95

In the classrooms, students enroll in savings schemes voluntarily and deposit money on a weekly basis. Parents can encourage their children to save but cannot participate directly in the savings scheme. Children can manage their money with accounts that are registered both in personal passbooks and individual ledgers. In addition children and youth learn about the values of money, money management skills, and social values that empower children to become responsible, proactive citizens who can break the cycle of poverty. As of June 2012, Aflatoun has reached over 1.3 million children in 84 countries.96 44% (486,435) of these children actively save and have accumulated 1,439,561 euros. Children have participated in Aflatoun’s social and financial education programs in 8,391 schools and nonformal education centers. Lastly, Aflatoun has collaborated with 3,218 social enterprises and 5,111 financial enterprises end 2010.97 Whether nascent or well-established, non-government organizations and educational leaders continue to advocate financial, social, and livelihoods education for children and youth. When young minds grasp the importance of regular savings, money management, and early financial planning, they can apply these insights as proactive adults who hold stable jobs, build their own business, contribute to their communities, and even impart their financial behaviors to their own children.

5.2 Innovation in Banking Products and Channels of Distribution ‘I want to save to help my family.

I don’t really need the money myself.

I live a simple life.’

Boy, Grade 1 Student, Aflatoun participant (BESA)

Perceptive of their youngest clients, the financial service providers (FSP’s) that responded to the CYFI Banking Survey have designed financial products specifically catering to children and youth. Some have expanded their clientele to include children and youth either to promote corporate responsibility, or as part of their strategy for business expansion. However, a limited number of banks have been at the forefront of developing innovative, culturally conscious, and diverse financial products because only

Ibid. p. 5 Ibid. p. 5 93 Ibid. p. i 93 Ibid. p. i 94 “Aflatoun,” Coop NATCCO Network Website, accessed July 18, 2012, http://www.natcco.coop/index.php?Itemid=63&id=56&option=com_content&view=article 95 Ibid.

96 “Result to Date”, Aflatoun, accessed July 18 2012, http://www.aflatoun.org/story/story-selected/Results-to-Date 97 Ibid.

98 Hirschland, Madeline Youth Savings Accounts: A Financial Service Perspective a Literature and Program Review, Micro-report #163 Washington DC: United States Agency for International Development, May 30, 2009.

99 “Children’s Savings Account,” Bank West Australia, accessed July 18, 2012, http://www.bankwest.com.au/personal/everyday-accounts/everyday-transactionaccounts/childrens-savings-account 91 92

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a handful of them are legally able to provide financial products to children and youth. (See Figure 5.6) The banks that are conscious of the needs of children and youth have designed savings accounts customized to young people’s irregular income, underdeveloped financial knowledge, and limited bank-usage experience. Current child savings accounts provide security of assets, flexibility in withdrawals, convenient locations of physical branches, and lower minimum deposit/balance requirements.98 FSP’s have modified the age limit, delivery channels, account restrictions (parental control and financial liquidity), service fees, market incentives (with higher interest rates on savings), performance rewards, and value added services to best serve their youngest clients.

Swiss francs.103 Also, UBS provides numerous extra perks for young savers such as competitions with attractive prizes, Topsy advent calendars, gift cards and many more surprises.104 Moreover, UBS Generation savings accounts for young people ages 12 to 22 benefit from preferential interest rates, no account charges or maintenance fees, and free UBS Credit Card. When a young saver joins the UBS KeyClub, s/he can take advantage of discounts and free offers exclusive to Generation clients with Euro26, Switzerland’s most popular youth card.105

In order to provide tools to educate children about money, some Western banks are offering child savings accounts that target children between ages 6 to 18. Bank West Australia provides Children’s Savings Accounts that are available to children under 15, charge no fees or charges, allow parents to access the accounts via phone and online banking, and earn credit interest which is calculated monthly and paid annually.99 The accounts were created with the belief that “when you teach your kids about managing money, and how to save, you’re helping them develop good financial habits that can last a lifetime.”100 Likewise, HSBC UK offers MyMoney to children and youth: a package of a savings account (called MySavings) when children are aged 7 or over and a current account (called MyAccount) when children are aged 11.101 With MySavings, a child can open an account with a minimum balance of £10, earn monthly interest, and manage his account online or on his mobile 24 hours a day, 7 days a week. With MyAccount, a child will receive a HSBC Visa Debit Card and PIN with parental permission and use it in shops, online, and at cash machines.102 The child is protected from credit card debt because he can only spend what is in his current account.

Other organizations in developed countries offer money management programs, savings accounts, and opportunities to build personal assets to institutionalized children and youth, recognizing that many lack the knowledge and resources for successful transitions into adulthood. In the United States, The Jim Casey Youth Opportunities Initiative established Opportunity PassportTM: Building Assets for Youth Aging Out of Foster Care in 2009 to assist youth in the transition period between leaving foster care and becoming independent adults. The innovative matched-savings program enables young people to save and accumulate matched assets worth $1000 in Individual Development Accounts (IDA). These assets are contributed to education, property and many other areas that are generally provided for those children who grow up in financially capable households. For instance, Danielle Brunetta in San Diego, California participated in an Opportunity PassportTM program to replace her car that was totalled in an accident.

Since then, she had faced difficulties raising her second child and maintaining a part-time job as a young, 20 year old mother. After purchasing a car with the match savings program, Danielle has obtained a full-time job and goes to schools in the evenings.106 Since its inception, the program has reached 4,431 children over the age of 15, who have saved 5,401,110 USD and taken advantage of opportunities for earning income.107

Furthermore, Western banks designed incentives and value added services that build excitement around children’s savings and promote sustainable financial behaviour. UBS in Switzerland credit savings accounts for young people or investment fund accounts opened for new-borns with 20

Banks in developing countries have created programs that link children and youth to financial services and begin building trusting relationships with the younger generation.

Hatton National Bank (HNB), a prominent commercial bank in Sri Lanka, collaborated with the Ministry of

Ibid.

“MyMoney,” HSBC UK, accessed July 18, 2012, http://www.hsbc.co.uk/1/2/current-accounts/under-18-bank-account 102 Ibid.

103 “Private Clients: Our Offer for Children Little Savers Do Well at USB Too,” UBS, accessed July 18, 2012, http://www.ubs.com/ch/en/swissbank/private/ lifecycle/children.html 104 “Private Clients: Our Offer for Children Little Savers Do Well at USB Too,” UBS, accessed July 18, 2012, http://www.ubs.com/ch/en/swissbank/private/ lifecycle/children.html.

105 “Profit & Fun: UBS KeyClub – Special Offers, Euro 26,” UBS, accessed July 18, 2012, http://www.ubs.com/ch/en/swissbank/private/young_people/generation/ young_keyclub/spendingpoints/special_offer.html 106 The Jim Casey Youth Opportunities Initiative 2009, Opportunity Passport TM: Building Assets for Youth Aging Out of Foster Care, (Missouri, United States: The Jim Casey Youth Opportunities Initiative, June 2009), accessed July 18, 2012, http://www.jimcaseyyouth.org/opportunity-passporttm-building-assets-youthaging-out-foster-care 107 CYFI Education Survey 2011 100 101

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Figure 5.6 Institutions That Can Legally Provide Products for Children 70

Number of Institutions

60 50 40 30 20 10 0 Banks

Cooperatives / Credit Unions

Microfinance Institutions

Other

Financial Service Providers (FSPs) Source: Child Finance Survey Results from CYFI Bank Survey 2010

Education to establish nationwide Student Banking Units in schools. These deposit centers are safe places for students to formally save money and develop life-long savings habits. Through the Student Managers Programme, HNB selects five secondary-level students to manage the daily operations of a mini-bank under the supervision of a teacher or HNB representative.108 In addition, HNB has placed regulations that protect children from the risk of their parents emptying their accounts for non-urgent reasons.109 Currently, HNB operates 200 Student Banking Units in 200 schools across the country through 180 branches.110 Since 1990, over 600,000 students have become clients of HNB through 200 Student Banking Units; HNB holds savings deposits up to nearly USD 40 million from these students.111 Similarly, Al-Amal Microfinance Bank in Yemen was established in 2008 based upon the principle of universal financial inclusion, covering the unbanked population, youth, and women. Children and youth under 18 can open Child Savers (savings accounts) with parental permission and only need to maintain a minimum balance of 1 USD,

while adult accounts require a balance of 2.50 USD.112 Where physical branches are too costly, Al-Amal provides money boxes in schools for children to save.113 By the end of 2010, Al-Amal had mobilized over 31,000 USD through 6,317 child savings accounts (44% of its total savings accounts).114 In addition, 5,000 youth over the age of 18 had opted to open adult savings accounts.115 Other FSP’s and organizations are creating innovative, inexpensive, and inclusive banking infrastructure to serve children and youth, especially in low-income countries. In Africa, mobile banking has linked youth to financial services at an increasing scale as mobile systems forgo the high cost of physical branches in a commercial banking infrastructure.

According to GSMA African Mobile Observatory 2011, mobile penetration in the top 25 most connected African countries (together forming 91% of the continent’s mobile connections) is 62% and is projected to reach 84% by 2015.116 Moreover, mobile is considered to be an integral part of youth life and emerging markets: 74% of mobile owners said that it is their number one asset.117

Abeywickrema, Chandula Hatton National Bank (HNB), Cast Study No. 1: The Role of Hatton National Bank in Creating Access to Financial Services for Youth in Sri Lanka (Washington DC: Making Cents International – Youth-Inclusive Financial Services Linkage Program (YFS-Link), September 2009), accessed July 18, 2012, http://www.makingcents.com/pdfs/resources/caseStudy10/HattonNational_Case%20StudyNo.1_September%202009.pdf 109 Ibid.

110 Ibid.

111 Ibid. p. 5 112 “Child Savings Product,” Al-Amal Microfinance Bank Website, accessed July 18, 2012, http://www.alamalbank.com/index.php?option=com_content&view=art icle&id=232&Itemid=246&lang=en 108

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More FSP’s are beginning to recognize the potential for children and youth to save substantially and build a stake in their future. YouthSave is a consortium project led by Save the Children in partnership with the Center for Social Development at Washington University in St. Louis (CSD), the New American Foundation (NAF), and the Consultative Group to Assist the Poor (CGAP), and supported by The MasterCard Foundation.122 YouthSave delivers sustainable savings products to low-income youths (age 12 to 18), evaluates the usage and impact of child/youth savings accounts, and shares successful practices with other FSP’s in Colombia, Ghana, Kenya, and Nepal.123 By Partnering financial institutions and researchers of this project aspire to raise awareness and inform action on youth savings among other financial providers, educational leaders, social service providers, and policy makers.

Notable FSP’s in developed countries have been providing savings accounts and financial incentives that encourage

5. Early Successes and Innovation in Financial Education and Financial Inclusion

In Mongolia, MFI XacBank offers a Nomadic Banking program, a mobile-based savings and payment platform to assist and reach the banked and unbanked clients. Those in the most remote areas of Mongolia have constant access to Future Millionaire, a child savings accounts program that awards children 3000MNT (2.245 USD) at birth and provides competitive, annually compounded interest.118 Children, youth, and their parents can make deposit transactions and same-day transfers between AMAR accounts (XacBank´s mobile accounts), view transactions, check/print account balances, and receive money through AMAR agent.119 Mobile banking has the potential to reach even more children and youth in high-income countries. In the U.S., nearly half of children age 8 to 12 year old own cell phones while four out of five teens (17 million) carry wireless devices.120 In Mumbai, India, nearly 54% of the population is under 24. Those under 25 are among the most tech-savvy of the population and contribute to the expanding youth market that heavily demands technology.121

children and youth to practice money management, spend wisely, and build assets that help fulfil lifelong dreams or ambitions. Likewise, several banks in developing countries have recognized that their commitment to serving children and youth is integral to the nation’s economic development and social stability. Early exposure to savings not only encourages children and youth to plan their transitions into adulthood, but also increases banks’ revenues and strengthens client bases. Through market research and product development, financial institutions and researchers in developed countries are also recognizing the relevance of child and youth savings to young people’s future economic stability. As a result, these institutions have begun programs, collaborations, and partnerships that increase opportunities for children and youth to save early and shape sustainable financial habits.

5.3 Impact on the Public Regulatory Framework In light of the increasing youth population in developing countries (projected to reach 89% of the youth population worldwide by 2025),124 12.6% global youth unemployment rate,125 and limited growth prospects for youth employment, governments (e.g. policy makers, regulators, and ministries) are pursuing national initiatives to improve youth access to education, reduce poverty, and develop the next generation of economic citizens. Despite high cost of national programs and stagnant job markets, these governments see youth financial inclusion and education as a worthwhile investment in the development and empowerment of the next generation.

In some countries, the mission and importance of the Youth Finance Movement is just beginning to receive national attention. In the United States, The U.S. Congress Representative Emanuel Cleaver introduced the H.R. 626: Financial Literacy for Youth Act of 2011 which “require[s]

Ibid.

Al-Waell, Ammar and Storm, Lara Case Study No.16: First Middle Eastern Microfinance Bank Puts Youth First: United States, Making Cents International – Youth-Inclusive Financial Services Case Study Series 2011, Washington DC, March 2011.

115 Ibid.

116 Page, Mark, Viviez, Larurent and Molina, Maria, African Mobile Observatory 2011: Driving Economic and Social Development through Mobile Services,: GSMA, London, UK, January 2011.

117 GSMA mLearning, Shaping the Future – Realising the potential of informal learning through mobile, The Development Fund, London, UK, May 24, 2012).

118 “Children´s Savings: Future Millionare,” XacBank, Accessed July 18, 2012, http://www.xacbank.mn/en/169/individual/savings/future-millionaire 119 “Children´s Savings: Future Millionare,” XacBank, Accessed July 18, 2012, http://www.xacbank.mn/en/169/individual/savings/future-millionaire 120 Lejnieks,Carly. Teenagers: A Generation Unplugged, (Harris Interactive, September 12, 2008).

121 MACRO, A Report on Study of Mobile Phone Usage among the Teenagers and Youth in Mumbai, (Market Analysis & Consumer Research Organization (MACRO), April-May 2004).

122 “About YouthSave,” YouthSave: Helping Youth Build a Tangible Stake in Their Future, accessed July 18, 2012, http://youthsave.org/content/about-youthsave 123 “Countries,” YouthSave: Helping Youth Build a Tangible Stake in Their Future, accessed July 18, 2012, http://youthsave.org/content/countries 124 Youth Employment Summit Secretariat, “Youth Unemployment: The Current Scenario,” (Youth Employment Summit Secretariat, May 2002).

125 Employment Trends unit of the ILO Employment Sector, “Global Employment Trends for Youth 2012,” International Labour Organization, May 22, 2012.

113 114

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Case Study 3

Binda Revamps the Family Business Although Binda did not complete her secondary school education in Bangladesh, the 18-year-old single handedly manages her family’s poultry farm after receiving business training and building financial literacy through the Ramrabon Adolescent Club, a local BRAC initiative in Kawalipara. Binda had transformed into a business woman when she saw an opportunity to apply her new-found knowledge to the family business. She began by sharing her knowledge with her father, who was the sole manager of the business at the time. For instance, she suggested vaccinating the poultry to improve their health and longevity. Impressed by Binda’s efficient operations of the business, her father holds an external, independent job to contribute to the household income. To date, the farm has earned Tk. 17,360 of profits while Binda has saved Tk. 1,041.116

the Secretary of Education to establish a pilot program to award grants to State and local educational agencies to develop financial literacy programs in elementary and secondary schools, and for other purposes.”126 Although the bill has only been referred to a committee, the existence of the bill shows that regulators recognize the importance of financial literacy and financial inclusion in the American education system.

Many other governments have recognized early on the importance of children and youth financial inclusion and have correspondingly created financial policies. In December 2002, Israel instituted the Supervisor of Banks: Proper Conduct of Banking Business based on the Capacity and Guardianship Law, 5722- 1962. The new policy permits minors (under 18 years of age) to open savings accounts under special guidelines. Current accounts can only be opened by a child older than 14 years old. A child between the ages of 14 to 16 must present written permission from a parent or guardian at the time of application. However, banking institutions may open a current account for a “working youngster” without the need for parental consent.

A “working youngster” is a minor over 15 years of age who receives wages on a regular basis that are transferred by his employer to the account.127 Other governments have focused on including a financial literacy and livelihoods education programs in the national education curriculum. In October 2010, the Government of Uganda and the International Labor Organization (ILO) partnered with Educate! to incorporate social entrepreneurship into the national education system.128 Beginning in 2012, the national entrepreneurship curriculum (which is based upon Educate!’s curriculum) will help over 45,000 A-level students (in their last two years of secondary school) per year to start enterprise that solve social or environmental problems. Students will learn essential entrepreneurial skills that will address poverty, disease, violence, lack of education, or pollution.129 In March 2012, Namibia’s Ministry of Finance and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) on behalf of the German Federal Ministry of Economic Cooperation and Development launched the Financial Literacy Initiative (FLI) to enhance financial education for individuals and

“H.R. 626: Financial Literacy for Youth Act of 2011,” govtrack.us, accessed July 18, 2012, http://www.govtrack.us/congress/bills/112/hr626 Child Finance Access Working Group, “Discussion Paper,” (Child and Youth Finance International, 2011).

128 “Changing Lives, Transforming Communities,” Educate!- Developing Young Leaders and Entrepreneurship in Africa, accessed July 18, 2012, http://www. experienceeducate.org 129 Making Cents International, “2012 State of the Field in Youth Economic Opportunities: A Guide for Programming, Policymaking, and Partnership Building,” Global Youth Economic Opportunities Conference, Making Cents International, Washington DC, Untied States, March 2012.

126 127

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Case Study 4

Helen in Kenya: Lifting her Family out of Poverty Helen grew up in Kenya suffering daily from poverty. She frequently went to sleep hungry and dropped out of school in 6th grade because it was a daily struggle to afford lunch, school supplies, and tuition fees. When her mother passed away due to AIDS, Helen became the family´s main breadwinner as the first born of her mother´s six children.

Her determination to earn money and support her sibling led her to ChildFund – WSN through which she attended the Dorsie School of Hairdressing and Beauty Therapy. With help from KIPEWA, a local WSN community based organization partner, she not only acquired valuable skills through vocational training, but also gained support from women who shared similar hardships and life struggles.

Upon graduation, she opened her own hair dressing and beauty salon and has earned enough to put her siblings in children’s homes where they were assured schooling, daily meals, and shelter. Helen marvels at the progress she has made so far, including her home with the sofa, gas stove, and television set that she purchased herself.

5.4 Conclusion micro-, small-, and medium- sized enterprises.130 FLI will be comprised of interactive approaches such as street theatre, TV, and radio shows; cooperation with schools; workplace activities; and training for entrepreneurs, supported by print materials.131 No matter how many child savings accounts and financial education programs are created, they can only reach as many children and youth as possible if government measures are also in place. Fortunately, government officials and policy makers around the world are recognizing the impact of early savings and financial education programs on the health of the economy and continue to push agendas for nationwide initiatives. Moving forward, national platforms must be established to create policies that will accelerate the Child and Youth Finance Movement.

Organizations worldwide have committed to serving children and youth through their innovative financial products and services, financial education programs, social education, livelihoods education, and provision of youth entrepreneurship opportunities. As the number of initiatives diversifies and scales up, it becomes important to monitor and evaluate their progress. Positive outcomes can also be replicated and used as inspiration for others to launch remodeled programs. Government organizations and policy makers have capitalized on their success to improve their initiatives and ensure children and youth have the necessary education and resources to develop into economically competent adults. CYFI will further identify established programs and future opportunities to build both national and global platforms, ultimately creating a multi-stakeholder network that exclusively caters to the future of children and youth.

14.03.2012 – Launch of Financial Literacy Initiative,” joint press release by Financial Literacy Initiative Secretariat in Namibia and Embassy of the Federal Republic of Germany, Botschaft der Bundersrepublik Deutschland Windhuk, accessed July 18, 2012, http://www.windhuk.diplo.de/Vertretung/windhuk/ de/07/__Pressemitteilungen/PM__2012/PM2012__en/Seite__pr__14__Financial_20Literacy_20Initiative.html 131 Ibid.

130

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Chapter 6

Impacting the Individual Child

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Chapter 6

Impacting the Individual Child 6.1 Linking Combined Financial, Social and Livelihoods Education with Financial Inclusion The work being done by organizations worldwide is extremely important and must be leveraged to ensure maximum positive impact on the individual child and youth within the framework of the Movement’s Theory of Change.

Based on the Movement’s Theory of Change, the CYFI Education Working Group has developed a Learning Framework which combines financial education with social and livelihoods education. The CYFI Learning Framework has been established as the basis from which curriculums complementing financial access should be based or adjusted.

Though the rationale for financial education has received academic support, impact studies of social and livelihoods education are still scarce. What is certain is that Economic Citizenship as defined by the Theory of Change requires a complex suite of skills that spans beyond a knowledge and understanding of basic finance. A social component of education involves a respect of rights and responsibilities to self, family, and others, and provides the foundation upon which financial decisions are made. Similarly, livelihoods education develops the cognitive and interpersonal skills which complement financial education as the young person enters (or prepares to enter) the workforce.

While academics continue to evaluate the importance of these two complementary elements of financial education, CYFI has conducted research on the effectiveness of various combinations of financial, social, and livelihoods

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curriculums and found support for its integrated strategy, thus beginning to prove the Theory of Change.132 To further examine how integrated financial, social and livelihoods education affect the behaviors of children and youth, we turn to the CYFI Education Survey.

Firstly, this survey showed that there is currently no program which offers a comprehensive curriculum covering all sub-components133 of financial, life skills, and livelihoods education outlined under the CYFI Education Learning Framework. This means that programs may offer all of the three components, yet each component may not cover all sub-components necessary to create a holistic curriculum that promotes Economic Citizenship. (Reference: Figures 5.2, 5.3, 5.4) Therefore, at this stage, it is difficult to ascertain what the effects are of a complete curriculum following the Learning Framework. As more and more programs take on these components, subsequent versions of Children, Youth & Finance will be able to assess these effects.

Nevertheless, interesting results were found when examining the effects of combining components.

• When programs combine any two components, the number of savings by the children and youth increases significantly.

• When a program offers a larger number of subcomponents of financial, social, and livelihoods education, the savings rates of participating children and youth is higher.

These results are visualized in Figure 6.1. This is compelling evidence for the theory that integrated financial, social and livelihoods education leads to increased savings behavior and financial inclusion.

C hild and Youth Finance International, “Children and Youth as Economic Citizens: Review of Research on Financial Capability, Financial Inclusion and Financial Education,” Research Working Group Report (Amsterdam: CYFI, 2012).

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6.2 Savings and Quality of Life Increase It is encouraging to see that combining the different elements of financial, social and livelihoods education has increased savings levels as one of its results. This, in turn, seems to have positive results on the quality of life for the child and youth.

The Child and Youth Finance Research Working group sought to explore the effects of savings children and youth.

They found that increased savings tended to positively affect youngsters in the following areas: • Economic and financial well-being • Financial knowledge and skills • Health and mental health • Reproductive and sexual health and • Academic and educational achievement133 The Child and Youth Finance International Education Survey has shown very positive initial results. In exploring the motives of savings, it found that 24% of students in partnering financial education programs save money (both formally and non-formally) for school supplies, the second highest motive for saving, falling after food and clothing (Reference: Figure 6.2). The young participants of financial education programs not only save money to supplement basic daily expenses, but also make education a priority.

Whether paying for school or buying a new phone, savings open the door for children to engage in activities that improve their quality of life. According to the Movement’s Theory of Change, these developments are very encouraging. Setting savings goals and making investments in one’s own future through education are exactly the types of outcomes expected by the Theory of Change. Saving for future wants, desires or necessities demonstrates an increase for the group participants in economic and social engagement. Saving for future school fees also demonstrates a belief in one’s self and a desire to improve one’s economic and social well-being. Although the long- term effects of such savings are still unclear, it is nonetheless positive and encouraging.

6.3 Increased Entrepreneurship In the same spirit of improving children’s quality of life, increased entrepreneurship by youth gives them the opportunity to develop their skills, create their own employment(as an added advantage, this is usually in a field of interest to them) and earn income for themselves and their families. This has a multiplier effect: youth-led enterprises have the potential to create long-term benefits

Figure 6.1 Percent of Child Savings by Education Three Components

4.23%

Two Components

0.38%

One Component

0.04% 0,00%

13.97%

15.91%

5,00%

Percent of Children Saving Formally

10,00%

15,00%

20,00%

Percent of Children Saving Non-Formally

Source: CYFI Survey 2011

133

C hild and Youth Finance International, “Children and Youth as Economic Citizens: Review of Research on Financial Capability, Financial Inclusion and Financial Education,” Research Working Group Report (Amsterdam: CYFI, 2012), 21.

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for the global economy. CYFI identifies entrepreneurship as an effective stimulant of the labor market. Not only will the enterprises generate income for their young founders but they will also create employment opportunities for youth and adults alike throughout its growth. In the current economy, Small Medium Enterprise (SME) is most relevant and effective in spurring net employment growth. Between 2002 and 2010, the net employment rate in the EU rose substantially, by an average of 1.1 million jobs (or 0.9%) each year 4 85% of this net employment growth was registered in the SME size class.134 Therefore, youth have the potential to build a relatively under-saturated sector of the economy.

To foster increased entrepreneurship, the Movement encourages financial and livelihoods education programs to cultivate a spirit of entrepreneurship. Children and youth should be taught realistic ways of converting their passions into social and financial enterprises. Furthermore, the Movement proposes that the effect of livelihoods education on enterprise can be multiplied through the introduction of a Figure 6.2 Motives for Child and Youth Saving

This graph shows that only 8% of students engage in financial and social enterprise in education programs without either a livelihoods or savings component. This jumps to 17% with the inclusion/addition of a livelihoods component. Combining this with a savings component causes the number of enterprises to multiply by 31%. These results demonstrate the inexorable link between increased enterprise and the combination of livelihoods education with a savings component.

As the Movement continues its efforts to increase youth entrepreneurship skills, it will continue working towards an integrated approach for holistic education linked to financial inclusion components.

18% 16%

savings component to the program. Financial and livelihoods education can lead to increased entrepreneurship and sustainable livelihoods. While this part of the Theory remains largely untested within the academic literature, the graph below shows that children and youth involved in these programs are thinking creatively and learning to seek out and create their own sustainable livelihoods. While the effectiveness of the entrepreneurial activities cannot yet be assessed, programs with at least two components of the holistic education are fostering a greater entrepreneurial spirit within children and youth. The base of these can be a key driver to future economic growth for individuals and societies as a whole. These findings are outlined in the graph below.

24%

11% 4% 27%

Food/Clothing

Family emergencies

School supplies

Sports/Recreation

Other

Household goods

Source: CYFI Education Survey 2011

134 135

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Manfred Schmiemann, “Enterprises by Size Class - Overview of SMEs Int He EU,� Eurostat, 2008. “Children and Youth as Economic Citizens: Review of Research on Financial Capability, Financial Inclusion, and Financial Education. CYFI Research Working Group Report, Amsterdam (2012): 16-17.

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6.4 Evidence from the Field Recently, the study of financial capability has become increasingly popular among NGOs, bilaterals, multilaterals, financial institutions and academia. While some pioneers, such as Michael Sherraden, Lew Mandell and Dean Karlan, have been steadily promoting and working on the topic for many years now, many organizations have begun much more involved programming that is addressing multiple points of the Theory of Change. What has emerged from these studies has been very encouraging, a small sample of which has been shared by partners within the CYFI network.

Effects of Financial Education and Inclusion

In a study conducted by Tower and McGuinness in 2011 of a financial education program in Mongolia implemented

by Xac Bank, it was found that participants that are offered both financial education and financial services demonstrated improvement in knowledge, skills attitudes and positive behavioral changes, conclusions backed by similar studies conducted in Bolivia and Sri Lanka135

• In a study by IPA conducted in Ghana, the initial findings suggest that more children involved in a formal school based savings program combined with financial education are saving money, becoming more risk-adverse and are shifting their savings to the formal school setting as a way to protect their money.136 This study is showing that positive behavioral change is being seen among children that are receiving financial education and are being offered a structured and safe savings system.

• Quoting a recent study in Uganda by Ssewamala, Neilands, Waldfogel and Ismayilova, CGAP stated that offering AIDS-orphaned children a combination of financial and nonfinancial services, such as business development and mentorship, was effective in reducing risky behavior in those involved in the study.137 This study is further proof that positive behavioral change is occurring amongst children when financial services are offered with one of the three aspects of the CYFI learning framework of financial, social and/or livelihoods education.

Figure 6.3 Livelihoods and Savings Components in Relation with Entrepreneurship % 35 30 25 20 15 10 5 0 Programs with Livelihoods Education and Savings Component Financial Enterprise

Programs With Livelihoods Education

Programs without Livelihoods Education or Savings Component

Social Enterprise

Source: CYFI Education Survey 2011

Jim Berry, Dean Karlan and Menno Pradhan, “Evaluating the efficacy of school based financial education programs in Ghana” (paper presented at the Child and Youth Finance International Summit, Amsterdam, April 3-4, 2012).

137 Tanaya Kilara and Alexia La Tortue. “Emerging Perspectives on Youth Savings,” CGAP Focus Note 82 (2012): 4.

136

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• In a study by MFO looking at low income girls completed in 2011, Sebstad found that savings programs are most effective when they are combined with financial education and social support. Furthermore, she went on to say that, “programs that blend financial education with savings and social support make good economic and social sense as investments in the well-being of girls, their families, their communities, and the economy as a whole.”138 Effects of Financial Inclusion

• In the beginning phases of the YouthSave project in Ghana, researchers from the Center for Social Development have found that of the youth involved in the program, 60% indicate that of the money they have in their possession most is being saved.139 Further findings from the YouthSave project in Ghana, Kenya and Nepal, show that most children are saving for their own education and were planning to use their savings for buying day-to-day items such as shoes, clothing, hygiene items and school-related expenses.140 This study suggests that financial inclusion alone, in accordance with the Assets Theory work of Michael Sherraden, can have highly positive effects on the development and behavior of children and youth, spurring greater educational aspirations and learning.

• Furthermore, UNCDF’s research conducted on the YouthStart program on 6,000 youth from nine countries (Togo, Mali, Burkina Faso, Democratic Republic of Congo, Senegal, Ethiopia, Malawi, Uganda, and Rwanda). Young children in Uganda saved mainly for emergencies, school fees, and clothing, while teenagers in school saved for entertainment and electronic goods such as mobile phones, airtime, and the carnival. Out-of-school teenagers were saving for school fees (to return to school), home improvement, and working capital for business. Young mothers saved for clothing, food, emergencies, and school fees for their children.141 Effects of Financial Education alone

• The Financial Education Fund found that in the projects that they support in Sub-Saharan Africa, financial education targeting children and young people can create a multiplier effect, as knowledge and skills are passed on to parents and families.142

6.5 Further Testing the Theory of Change As has been shown in the preceding four sections of this chapter, the movement is making headway in testing the Theory of Change. We have seen that programs offering financial education are already showing improved knowledge, skills, abilities and positive attitudinal changes amongst their participants. When programs integrate at least two of the three educational components, we see that there is increased savings amongst the participants.

Finally, entrepreneurial activities is higher amongst students involved in the programs.

In order for the Movement to truly test the Theory of Change, there is a lot of work that needs to be done in the next four years. For us to reach the bold outcome of economic citizenry, a few developments within existing programs must take place.

First, the programs must integrate all three aspects of the learning framework: financial, social and livelihoods education. Once these are operational, the partner NGO or other provider can work with one of the financial institutions within the network offering certified, child-friendly accounts.

At this point, the children and youth enrolled in the program can decide whether they want to utilize their learning and open a savings or current account. This way, we will be able to track the children and youth that are involved in the programs throughout the network and whether they are saving and the amounts (all anonymously). We have already seen from existing projects by our partners that programs combining education with inclusion be effective in positive behavioral change. The movement must further assess the relative effectiveness of programs offering all three educational aspects combined with inclusion. As an added bonus, this will allow us to assess how well the partnerships are occurring between the organizations within the network.

Jennefer Sebstad, “Girls and Their Money: Strategies For Promoting Savings, Financial Education and Social Support For Adolescent Girls in Low-Income Countries,” Microfinance Opportunities (Nov. 2011): 8-9.

139 Gina A.N. Chowa, Mat Despard and Isaac Osei-Akoto, “Youth Saving Patterns and Performance in Ghana,” YouthSave Research Brief 12-36 (2012): 2.

140 Lissa Johnson et al., “Product Pilot Performance: Youth Savings Performance in Ghana, Kenya, and Nepal,” Youth Save Research Brief 12-38 (2012): 3.

141 Danielle Hopkins et al, “Policy opportunities and constraints to access youth financial services,’’ Insights from the UNCDF’S Youthstart programme, 12.

142 “Educating for financial inclusion in Sub-Saharan Africa”, Financial Education Fund, Johannesburg: Financial Education Fund: 9.

138

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6.6 Conclusion As we explore the effects on children of international efforts for financial, social and livelihoods education and financial inclusion, we begin to take the first steps in assessing the Movement’s Theory of Change. We have already seen positive signs that what is currently being done is making great strides towards showing the efficacy of the theory.

This includes increased savings and positive behavioral changes as seen in the attitudes of children and youth about savings and saving goals. Along with this are the resulting increases in entrepreneurial activity. These are clear outcomes that demonstrate the validity of the Theory of Change and its impact on the first level of increased financial capability and empowerment. Further research is

6. Impacting the Individual Child

Second, we will be redesigning the surveys we use to collect information from partners in order to better track the outcomes within the programs. We have theorized and have had some backing with this version of Children, Youth & Finance that we should see improved financial knowledge, skills and abilities and a greater view of oneself. However, we need to check whether these are holding true across the network and if they are being sustained within the programs. Short- term gains are good, but for the sake of the movement we must be able to see whether these are translating into medium-longer term outcomes in knowledge, attitudinal and behavioral changes. In so doing, we will be able to gauge our impact on the ultimate beneficiary of the Movement: the child.

necessary to check on the sustainability of the longer term outcomes found at the Economic Citizenship level, though these initial findings suggest that the movement should begin seeing further improved outcomes at this level also.

CYFI believes there is a sense of urgency in this. As Reid Cramer of the New America Foundation recently stated in an article published in the Washington Monthly, “when they [the economically disadvantaged and unbanked] need to conduct basic financial services, they are forced into the arms of the fringe financial sector, made up of payday lenders and check cashers, who make money by stripping assets away from aspiring families.”143 The OECD confirmed these findings in a recent report, stating “[The] fraction of population having access to formal financial products is small in many African countries, with large proportions of individuals using only informal products and services, or being completely excluded from financial sectors.”144 CYFI would also like to stress that this is the first year of data collection and much is still incomplete. We will refine our surveys and techniques in order to ensure that we are capturing what is occurring throughout the network. Future editions of Children, Youth & Finance will inform us on any improvements and innovations taking place in the network.

This furthers the Movement’s commitment to creating the necessary global momentum, coordination and impact.

Doing so will ensure that the Movement can reach a tipping point that aims to ultimately benefit every child and youth in the world.

“ Reid Cramer, “The Asset Agenda,” The Washington Monthly, July/August 2012, NP, http://www.washingtonmonthly.com/magazine/julyaugust_2012/ features/the_asset_agenda038412.php.

144 Flore-Anne Messy and Chiara Monticone, “The status of financial education in Africa,” OECD Working Paper 25 (2012): 7.

143

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Chapter 7

Reaching 100 Million Children

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Chapter 7

Reaching 100 Million Children Children and youth across the world are just now beginning to reap the benefits from newly-introduced initiatives to increase financial inclusion and financial, social and livelihoods education. The Child and Youth Finance Movement seeks to ensure that these modules become seamlessly integrated into national and international systems, particularly in the development or adjustment phases of the same systems. In so doing, the Movement aims to ensure that children entering school receive financial, social and livelihoods education, and have a savings account which they themselves own and operate.

Tipping point

A tipping point is defined as the point at which a series of small changes or incidents becomes significant enough to cause a larger, more important change.

Source: Oxford Dictionaries Accessed July 18 http://oxforddictionaries.com/ definition/american_english/tipping%2Bpoint

To achieve this, the Movement must amass enough momentum to reach a tipping point upon which existing systems and structures begin to change at an exponentially increasing rate. By engaging in a unified and global effort, the Movement can escalate in scale and become indelibly imprinted on national agendas. The Movement believes it will reach its tipping point at the end of its campaign in 2015, when it will have reached 100 million children in 100 countries.

7.1 Taking on the World’s Financial To reach the necessary impact and scale, the Movement is spurred on by the collaborative efforts of implementing organizations and policymakers, such as those outlined in previous chapters. By mobilizing and coordinating these efforts under a common strategy, the Movement is set to expand ecosystems in which child and youth rights and interests are protected, and their risks of financial exploitation are minimized.

This model for scalable impact is the result of a study of previous global Movements, which has shown that collaborative efforts have been successful in reaching a large scale in a short amount of time.

7.2 Studying Previous Movements Among the Movements studied are the Polio Movement, the Child Labor Movement and the Microfinance Movement.

The approach involving a single global network driving a cohesive movement was demonstrated to be successful in the Polio Eradication Movement of 1985. Efforts to eradicate Polio reached a tipping point after global assemblies, such

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7. Reaching 100 Million Children

Figure 7.1 Creating a Movement: Reaching the Tipping Point and Beyond Scale-up & systems change

‘Incumbent’aid solution

Volume

Concept initiation & proof of concept

Examples

Accelerators

Impact

Polio Vaccination - proven concept in Western World, took off when 1988 World Health Assembly decided on a total eradication by 2000

- Initiatives of World Health Organization in combination with UNICEF

- Roughly 90% of world population vaccinated - only 1900 cases of polio left in 2007

Micro finance - tried, tested and proved, took-off after MicroCredit Summit started to share best practices

- MicroCredit Summit - Multiple Western micro finance funds

- More than 130 million people are currently served with MF loans

ILO-IPEC- movement against child labor, took-off after strong support both financially as with reach by the German government in 1992

- German Minister of Labour, Norbert Blüm

- Many partners worldwide, putting the child labor problem solidly on the world map

Tipping point Time Source: WHO, UNICEF, MicroCredit Summit, ILO Child Finance International Strategy Document, McKinsey 2009

as UNICEF and World Health Organization, adopted the initiative to eradicate polio. This resulted in a global effort by governments to conform to a uniform strategy to spread immunization coverage. By 2009, there was a 99% decrease in Polio cases. (Reference: Figure 7.2) The decision to tackle polio as a global movement allowed for rapid, vigorous, and highly coordinated systems change to protect the health of the world population. The Child and Youth Finance Movement will emulate this impactful systems’ change strategy.

that this global movement brought together partners from across the world. “The number and range of IPEC’s partners has also expanded over the years, and now includes other international and government agencies, employers’ and workers’ organizations, private businesses, communitybased organizations, NGOs, the media, parliamentarians, the judiciary, universities, religious groups and, of course, children and their families.145 This global Movement has positively impacted the lives of millions of children across the world.146

The ILO-IPEC: Movement against child labor follows similar patterns. The movement took off in 1992 by the International Labor Organization under the International Programme on the Elimination of Child Labor (IPEC). In the ILO publication, “Facts on Child Labor”, the ILO states that “By December 2005, [IPEC] was operational in 86 countries, with an annual expenditure on technical cooperation projects that reached over US$70 million.” It goes on to describe 145 146

Facts on Child Labour, ILO, 2010, http://www.ilo.org/wcmsp5/groups/public/---ed_norm/---declaration/documents/publication/wcms_decl_fs_49_en.pdf.

Ibid.

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Figure 7.2 Growth of Polio Eradication Movement (1980 to 2007) 70,000

Immunization coverage Percent 100 90

Number of cases

60,000

80

50,000

70 60

40,000

50

30,000

40 30

20,000

20

10,000

10 0

0 1980 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 2007 Source: Child Finance International Strategy Document, McKinsey 2009

Another example of a global movement is that of Microfinance (please see figure 7.3 for more detail). This Movement took off in 1997 through the Microcredit Summit Campaign. By 2007, it had provided credit loans to 130 million individuals. An analysis of this movement highlights some key factors which led to its rapid growth: • Resourcing into the movement at the equivalent of US$ 8 billion from 2001 – 2009 through multiple western microcredit funds • Political will and support which placed the issue high on policymakers’ agendas • Synergized global efforts through such institutions as The Microcredit Summit Campaign, The Small Enterprise Education and Promotion Network (SEEP), The European Microcredit platform and many more • Surge of efforts at the grassroots level and increased interested by individuals and organizations The analysis of the growth patterns and critical success factors of these previous movements provides the base for Movement’s strategy. This was created through a consultative process with over 1000 stakeholders from a variety of sectors, as well as children and youth. For the movement to reach its tipping point, the goal is to have an increasing number of organizations and individuals from across the world are committing to reaching our target of reaching 100 million children in 100 countries by 2015.

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7.3 Setting the Wheels in Motion: Building a Child and Youth Finance Movement Central to the success of the Child and Youth Finance Movement is the ongoing collaboration between multiple stakeholders. As demonstrated by previous movements, this is an efficient and scalable means of arriving at a sustainable solution to address the lack of financial inclusion and education for children and youth.

The Child and Youth Finance Movement has begun harnessing the collective efforts of organizations and

‘I strongly support helping young people gain greater financial literacy as well as better access to services that will lead the way to employment, entrepreneurship and investing opportunities.’

Ban Ki-Moon in his letter to the first Annual Child and Youth Finance Summit & Awards Ceremony

Total people served

2,000 Sum of MF fund assets

7. Reaching 100 Million Children

Figure 7.3 Growth and Resourcing Patterns of the Micro Finance

140,000,000 120,000,000

1,500

100,000,000 80,000,000

1,000

60,000,000 40,000,000

500

20,000,000 0

0 1997

98

99

People served Fund assets

00

01

02

03

04

05

2006

Currently:

• More than 130.000.000 people served with credit loans • More than 3.500 active Micro Finance institutions world wide • Total international investment > US$ 8 billion from 2001 - 2009

Source: Micro Credit Summit Campaign; Grameen Bank; BRAC; Globalenvision; MixMarket, 2010 Child Finance International Strategy Document, McKinsey 2009

‘We recognize the need for women and youth to gain access to financial services and financial education’

G20 Leader’s Declaration, Paragraph 53, at the June 2012 Summit in Los Cabos, Mexico.

policymakers to create the momentum needed to bring about systems change for children’s financial issues. Within a space of a year, from 2011 – 2012, the Movements brought together a number of partners from across various issues on this global strategy. In April 2012, 346 participants from over 83 countries gathered at the first annual Child and Youth Finance International Summit to share, innovate and collaborate. This shared commitment by multi-stakeholders suggests that the necessary momentum has been created towards the stable and long-term growth of the Child and Youth Finance Movement.

Due to data limitations, the numbers outlined above do not fully capture the current reach of the Child and Youth Finance Movement. While the Education and Banking Surveys were critical in helping compile data, there was little information elsewhere on the levels of outreach to

children and youth. To collect information on governmentrun financial education and access initiatives, we turned to databases of the OECD or National Government websites.

Even in those databases, specific figures on children aged 0 – 18 were difficult to garner. The number of 18,738,224 children and youth reached has therefore been collected solely from NGOs and other service providers. Similarly, searching for data on the websites of financial service providers is an ongoing process, which does not often yield information on outreach specific to children and youth. Financial Service providers rarely publish outreach figures of their savings products for children and youth.

In subsequent versions of this publication, there will be increased attention to researching banking products and collecting country information. The goal is to gather crucial organizational, programming and outreach figures that have never before been collected and shared at such a global scale from those working in the area of financial inclusion and education for children and youth.

If the current levels of outreach for the Movement currently stand at 18,738,224 – will the Movement be able to reach its goal of 100 million children by 2015? Yes! We assume, as stated earlier, that these numbers are higher if we factor in the levels of outreach from governmental programs. But we still must walk a long path before we reach the 100 million target.

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• The United Nations has placed an emphasis on the importance of financial education and financial access for young people.

• G20 leaders have recognized the need for financial access and education and, as a first step, have called out to global bodies to investigate these issues further. This, coupled with the support of the UN are integral to amassing governmental backing on these Child and Youth Finance issues at the national levels. This will open the way for these issues to become institutionalized in national and international policy.

• Through NGO partners, the Movement is currently reaching 18,738,224 children around the world through financial education programs. This number is undoubtedly higher when considering how many children are reached through governmental financial educational programs.

• 55 reported savings products are being offered to children under the age of 18.

• 31 organizations have reported that they provide social, financial and livelihoods education in 41 programs.

Above is a list of organizations involved in the Child and Youth Finance Movement and what they are doing:

But it can be done. Once the number of Movement partners increases, and more governments, financial institutions, NGO and others contribute – the Movement can actually exceed the 100 million target. Here’s how:

Figure 7.4 Willingness to Contribute to the Movement

• The data collected on the numbers of children and youth by reached by NGOs reflects the work of only 44 NGOs. The number of NGOs contributing to the Child and Youth Finance Movement has, to date, reached over 200. The number of children reached by these new NGOs will increase exponentially, as more NGOs include related programming into new and existing work.

• According to the OECD database147 , 65 national programs on financial literacy are being offered. As outlined previously, we have not been able to assess the true number of children and youth being reached by such governmental programs. Such information will undoubtedly increase the outreach figures. In addition to this, the Child and Youth Finance Movement is currently working with 60 countries on creating policies and activities for reaching children and youth with financial literacy and inclusion programs.

46%

44%

10%

Respondants who believe their institutions would like to contribute to the Movement Respondants who believe their institutions would not like to contribute to the Movement Unsure Source: Child and Y Youth Finance Banking Survey 2011

147

80

OECD Gateway for Financial Education, http://www.financial-education.org (accessed July 19, 2012).

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7. Reaching 100 Million Children

The Role of Child and Youth Finance and its Secretariat Overall

• Promote and further the Child and Youth Finance Movement by involving an increasing number of members and contributors to the network.

• Coordinate and bring together the different contributors and stakeholders within the Child and Youth Finance Movement to ensure the dissemination of best practices and sharing of information. This is done through Expert Council meetings, Regional Meetings, The Child and Youth Finance Annual Summit and the through the Child and Youth Finance website (www.

ChildfinanceInternational.org).

Global Platforms

• Promote research in the field of Child and Youth Finance.

• As more awareness is created around the issues of financial inclusion, more financial service providers show interest in being a part of the movement. Consider the number of Financial Service Providers who showed interest in joining the Movement through the CYFI Banking Survey. When asked to state their willingness to contributing to the Child and Youth Finance Movement, 44% of FSPs responded with interest. (Reference: Figure 7.4) However, 38% were uncertain about their potential involvement.

• Leading academics are placing increased attention on the issues surrounding finance for children and youth. Taking the first steps to develop a body of research, the Child and Youth Finance Academic Working Group investigated the levels of current research on these issues. These were presented in a White Paper, which also offered recommendations for future research. As more academic research is done in this field, the Movement will grow and gather increasing support and awareness.

• Generate global media momentum so that more attention is focused on the need for safe financial products for children and young people.

• Promote Child and Youth Finance Education in countries and to create a global framework for educational curricula.

National Platforms

• Work with National Governments to develop action plans and policies on Child and Youth Finance issues.

Certification

• Advocate for savings products for children with commercial banks, microfinance institutions, and cooperative banks and other Financial Service Providers.

Week. Furthermore, 70 children participated at the Summit in 2012. Interestingly, outreach to schools about the Summit only yielded responses from 3 schools. Since then, due to increased outreach efforts and positive feedback from children and youth, 50 schools have shown interest. This is positive reaffirmation that as we increase our outreach and there is increased awareness on the issue, the Movement will be able to involve more children and youth through schools.

The Movement has already come a long way since its establishment less than a year ago. The interest, will and commitment from multiple and varied stakeholders have allowed the Movement to start forward on this positive course. Building upon this momentum, and on the increase in institutional awareness around the issue of child and youth finance, the Movement can leverage existing interest and create new opportunities to accelerate in reaching a larger number of children.

• As a Movement dedicated to children, there is little doubt that the direct involvement of children and youth is imperative. Children and Youth across the world are taking part in the Movement, especially through schools.

Over 33,000 children from over 26 countries took part in the first ever celebrations of Child and Youth Finance

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No. of children and youth reached (in million)

Figure 7.5 Projected growth of the Child and Youth Finance Movement

300 250 200 150 100 50 0 2010

2011

2012

2013

2014

2015

Year

7.4 Beyond 100 Million Children The Movement has already started its course towards reaching its desired 100 million target. The growth projection for 2015 outlines the direction of the Movement in achieving this. A conservative estimate has the movement reaching its 100 million goal. A more optimistic estimate shows the movement exceeding this goal and reach almost 130 million children.

The following factors have been taken into consideration in developing this projected growth pattern: • Data limitations mean that we do not have a complete overview of the outreach levels of activities by governments, NGOs, financial institutions and many others. As this field grows and we are able to capture more data, the full scope of existing activities will be available. This will build up over the course of 2-3 years. • New players will continue to join the movement. While some of these may be institutions who are already involved in the fields of financial literacy and access for youth, some of these may be organizations who had never engaged in such activities. Examples are Equity Bank in Kenya which is developing a new certified product for children and youth. Similarly, the Union of Arab Banks and the European Banking Federation are among those who have joined the Movement and only now have begun undertaking initiatives with member banks on this issue.

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An initial, informal tally in 2010 indicated that there were around 9 million children being reached with financial education and provided financial access. Today, taking into account data limitations, the number stands at over 18.7 million. This growth is shown in Figure 7.5. Similar growth patterns will occur in the subsequent two years, as more information on the Movement is collected and as an increasing numbers of stakeholders take part in the Movement. By 2014, a large portion of this data will have been collected and the movement will grow at a constant rate. Much like the trend of the Polio Movement between 1985 and 1986 (Figure 7.2), the growth rate will naturally taper.

History demonstrates that this will be followed by consolidation, after which the Movement will enjoy another growth due to the scale-up of activities. The growth in 2014 and 2015 is based on the current growth rate of 25%.

This assumes constant leadership and capacity at the Child and Youth Finance Secretariat. It is essential that the Secretariat receive the necessary funding to carry out the necessary activities and answer to the growing demand of the network.

7. Reaching 100 Million Children

7.5 Conclusion The more optimistic view as shown by the fainter line in Figure 7.5 follows the trends of the Microfinance Movement, which benefited from an injection of resources. The Child and Youth Finance Movement, of course, is operating in a different financial climate than the one that launched the Microfinance Movement. Today, financial institutions, foreign aid agencies, NGOs and many others are being forced to limit their spending in a bid to conserve resources.

The Movement is well on its way towards reaching its tipping point. As it collects more information on the state of the Movement, and an increasing number of organizations take on Child and Youth Finance activities, there is little doubt that this movement will reach 100 million children by 2015.

By leading international collaboration on child and youth financial affairs and leveraging existing interest in the Movement, CYFI hopes to grow the Movement towards a uniform and a sustainable global system. The strategies prioritized in this publication will transform the visions in CYFI’s Theory of Change into socially and financially empowered young people. Financial inclusion policies will extend the opportunity to save to millions of young individuals. Social, financial, and livelihoods education will give children and youth the knowledge to manage money and the motivation to seek social and economic advancement. These two tactics will be jointly adopted by national platforms, to promote transparency and longevity of the initiatives. Finally, all nations, institutions, educators, and children and youth will be connected through a global platform of information and support. The joint efforts of Movement stakeholders strives to create 100 million confident and capable children and youth by 2015, who will grow to be 100 million leaders contributing to the social and economic development of their countries.

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Abeywickrema, Chandula. Cast Study No. 1: The Role of Hatton National Bank in Creating Access to Financial Services for Youth in Sri Lanka. Report. Youth-Inclusive Financial Services Case Study Series 2011. Washington DC: Making Cents International, 2009.

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Cecchetti, Stephen S., M.S. Mohanty, and Fabrizio Zampoli. The Real Effects of Debt BIS Working Papers no. 352. N.p.: Monetary and Economic Department, 2011.

Child Finance Access Working Group. Discussion Paper. Research report. N.p.: Child and Youth Finance International, 2011.

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Endut, Norhana, and Toh Geok Hua. Household Debt in Malaysia BIS Papers no. 46. N.p.: Bank For International Settlements, 2009.

Facing the School Dropout Dilemma. Washington, DC: American Psychological Association, 2012.

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“Facts and Statistics.” The Greater Baton Rouge Literacy Committee. Accessed July 19, 2012.

Fang, Huei-Jung. Compilation and Analysis of Taiwan’s Household Debt Statistics IFC Bulletin no 34. N.p.: Bank for International Settlements, 2010.

Financial Literacy for Youth Act of 2011, H.R. 626, 112th Cong. (2011).

Financial Literacy Initiative Secretariat in Namibia, and Embassy of the Federal Republic of Germany. “14.03.2012 – Launch of Financial Literacy Initiative.” News release. March 14, 2012. Accessed July 18, 2012. http://www.windhuk.diplo.de/Vertretung/windhuk/de/07/__ Pressemitteilungen/PM__2012/PM2012__en/Seite__pr__14__Financial_20Literacy_20Initiative. html.

Hillman, Arye L., and Eva Jenkner. “Educating Children in Poor Countries.” Economic Issues, no. 33 (2004).

How Undergraduate Students Use Credit Cards. N.p.: Sallie Mae, 2009. Accessed July 19, 2012. http://static.mgnetwork.com/rtd/pdfs/20090830_iris.pdf.

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HSBC Bank UK. “MyMoney.” Personal Banking: Bank Accounts, Mortgages, Online | HSBC Bank UK. Accessed July 18, 2012. http://www.hsbc.co.uk/1/2/current-accounts/under-18-bank-account.

Improving Financial Literacy: Analysis of Issues and Policies. N.p.: OECD, n.d.

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Investor Education Fund. “Taking Stock in Your Future.” GetSmarterAboutMoney.ca. Accessed July 18, 2012. http://www.getsmarteraboutmoney.ca/en/education-programs/for-teachers/curriculumtools/taking-stock-in-your-future/Pages/default.aspx.

Jensen, Peter, and Helena Skyt Neilson. “Child Labor or School Attendance? Evidence from Zambia.” Journal of Population Economics 10, no. 4 (1997).

Johnson, Samuel. The Inevitable Consequence of Poverty Is Dependence. N.p.: Poverty Program, n.d.

Junior Achievement Worldwide. “Elementary School Programs: Overview.” Junior Achievement.

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Kendall, Jake, Mylenko, Nataliya, and Ponce, Alejandro, Measuring Financial Access around the World, Policy Research Working Paper, The World Bank, March 2010.

“Knowledge for Tackling Childhood Poverty.” Child Policy Research and Policy Centre. http://www. childhoodpoverty.org/.

Lee, Seong-Tae. “Household Debt – Implications for Monetary Policy and Financial Stability Opening Address.” Speech, Seoul, South Korea, March 28, 2008.

Lejnieks, Carly, comp. Teenagers: A Generation Unplugged. Research report. N.p.: Harris Interactive, 2008 “Life Skills Education.” UNICEF. Accessed July 19, 2012. http://www.unicef.org/lifeskills.

Low, Lana. Financial Literacy and College Success at Minority-Serving Institutions. N.p.: n.p., 2009.

Lubwama, Alice, and K.M.D.B. Rekogama. Institutionalizing Youth Financial Services to Achieve Scale. Washington, DC: SEEP Network, 2011.

Mandell, Lewis. The Impact of Financial Education in High School and College on Financial Literacy and Subsequent Financial Decision Making. San Francisco, CA: n.p., 2009.

Maroc Finance. “Journée De La Finance Pour Les Enfants, Le 16 Mars 2012.” March 13, 2012.

MasterCard Worldwide. “MasterCard Worldwide and Right To Play International Collaborate on Financial Literacy.” News release. March 19, 2012. Accessed July 18, 2012. http://newsroom. mastercard.com/press-releases/mastercard-worldwide-and-right-to-play-internationalcollaborate-on-financial-literacy/.

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Opportunity Passport (TM): Building Assets for Youth Aging out of Foster Care. Report. N.p.: 1. The Jim Casey Youth Opportunities Initiative, 2009.

Page, Mark, Larurent Viviez, and Maria Molina. African Mobile Observatory 2011: Driving Economic and Social Development through Mobile Services. Report. London: GSMA, 2011.

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PISA 2012 Financial Literacy Assessment Framework. N.p.: OECD, 2012. Shaping the Future – Realizing the Potential of Informal Learning through Mobile. London: GSMA mLearning, 2012.

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Schmiemann, Manfred. “Enterprises by Size Class - Overview of SMEs Int He EU.” Eurostat, 2008.

Sen, Amartya. “Human Rights and Capabilities.” Journal of Human Development 6, no. 2 (July 2005). Accessed July 19, 2012. http://www/ unicef.org/socialpolicy/files/ Human_Rights_and_ Capabilities.pdf.

Sherraden, M. S., L. Johnson, B. Guo, and W. Elliott. “Financial Capability in Children: Effects of Participation in a School-Based Financial Education and Savings Program.” Journal of Family and Economic Issues 32 (2011): 385-99. http://csd.wustl.edu/Publications/Documents/WP09-16.pdf.

Sparreboom, Theo. Global Employment Trends for Youth 2012. N.p.: International Labor Office, 2012.

State of the World’s Children 2012. N.p.: UNICEF, 2012 State of the World’s Children 2012. N.p.: UNICEF, 2012. Street Kids International: Catalyst for Better Lives. “Streetwork.”Street Kids International. Accessed July 18, 2012. http://www.streetkids.org/ what_we_do/street_work.php.

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Teens and Money Survey Finding: Insights into Money Attitudes, Behaviors and Expectations of 16to 18-Year-Olds. N.p.: Charles Schwab & Co., 2011.

Tens of Millions of Children Living in Poverty in the World’s Richest Countries. Brussels, Belgium: UNICEF, 2012.

UBS Switzerland. “Private Clients: Our Offer for Children Little Savers Do Well at USB Too.” UBS. Accessed July 18, 2012. http://www.ubs.com/ch/en/swissbank/private/lifecycle/children.html.

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Vittles, Paul, Duncan Rintoul, Benita Power, and Nichola Keevy. Young People (12 - 17 Years) & Financial Debt. N.p.: National Affairs Research Scheme, 2008 Volonte, Luca. The young generation sacrificed: social, economic, and political implications of the financial crisis. Committee on Social Affairs, Health and Sustainable Development. Council of Europe Parliamentary Assembly, Doc 12951, 08 June 2012.

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YouthSave. “About YouthSave.” YouthSave: Helping Youth Build a Tangible Stake in Their Future.

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YouthSave. “Countries.” YouthSave: Helping Youth Build a Tangible Stake in Their Future. Accessed July 18, 2012. http://youthsave.org/content/about-youthsave.

Zambia DHS EdData Survey 2002. Calverton, MD: ORC Macro, 2003. Accessed July 19, 2012. http:// www.zamstats.gov.zm/media/zdes.pdf.

2012 State of the Field in Youth Economic Opportunities. N.p.: Making Cents International, 2012.

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Glossary of Terms Term

Definition

Banking Product

A product which is offered by a Financial Institution. The Movement considers only savings account and current accounts on which there can be no overdrafts

Child

An individual under the age of 18, or under the age of majority as prescribed by national law (UNCRC, http://www2.ohchr.org/english/law/crc.htm)

Child and Youth Finance International (CYFI)

The legal organization responsible for delivering the Child and Youth Finance program which employs the Secretariat

Child and Youth Finance International Supervisory Board (the CYFI Supervisory Board)

The board of Child and Youth Finance International, responsible for its strategic direction and supervisory management

Child and Youth Finance activities

All activities relating to the promotion and implementation of activities to further financial access and education as described in the Child and Youth Finance strategy

Child and Youth Finance Annual Summit & Award Ceremony

The annual meeting of CYFI's members and stakeholders. The purpose of this summit is to disseminate best practices and share innovations and experiences among members.

Child and Youth Finance Day/ Week

The Day/Week dedicated to the promotion of Child and Youth Finance activities within countries.

Child and Youth Finance Education

An educational learning framework that integrates components of financial, social and livelihoods education for children and youth

Child and Youth Finance Movement (the Movement)

An international, inclusive, multi - stakeholder movement to support the creation and strengthening of systems, structures and policies which provide children with choices, informs them of their rights, instills in them values, empowers them to make sound financial decisions, build their assets and invest in their own futures.

Child and Youth Finance Movement Theory of Change

The theoretical base upon which the Movement stands which outlines how the different interventions of the Child and Youth Finance Movement lead to the desired outcomes of the Child and Youth Finance Movement

Child and Youth Finance Network The group of experts, educators, NGOs, and financial institutions and experts from various relevant sectors who contribute to, and further the efforts of, the Child and Youth Finance Movement Child and Youth Friendly Banking A system of banking that promotes the creation and provision of safe financial products for children which are designed to promote financial access, financial safety and financial capability for all children under the age of majority.

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Term

Definition

Child and Youth Friendly Product Certificate

The certificate awarded to banking products to a licensed financial institution for banking products offered to children and youth which meet the required Child and Youth Friendly product controls

Child and Youth Friendly Product

These are currently defined as savings accounts and basic current accounts which meet a set of pre-defined set of minimum standards as set by the Movement’s Expert Council of financial regulators from across the world. These criteria ensure that the products remain inclusive and appropriate, and are designed to meet the best interest of the child.

Economic citizenship

Economic and civic engagement to promote reduction in poverty, sustainable livelihoods, sustainable economic and financial well - being and rights for self and others.

Empowerment

Increasing an individual’s confidence and efficacy in controlling their lives, claiming their rights and building empathy with others.

Expert Councils

Groups of experts from different sectors contributing to the global movement on the different strategic focuses of the Child and Youth Finance Movement

Financial access

The means of safely accumulating, controlling and spending assets.

Financial education

CYFI is following the OECD definition: “the process by which individuals improve their understanding of financial products and concepts; and through information, instruction and/or objective advice develop the skills and confidence to become more aware of Financial risks and opportunities, to make informed choices, to know where to go for help, and to take other effective actions to improve their financial well-being and protection.” (OECD (2005). Recommendation on Principles and Good Practices for Financial Education and Awareness, http://www.oecd.org/ dataoecd/7/17/35108560.pdf)

Financial entrepreneurship

The ability to use one's technical and business skills to take advantage of market opportunities in an effort to deliver innovative products and services that generate a sufficient financial return.

Financial capability

The combination of knowledge, skills, attitudes, and behaviors that increase one’s financial literacy with access to financial products and services that provide them with the opportunity to act in their best financial interest

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Term

Definition

Financial inclusion

Access to financial products and services which are affordable, usable, secure and reliable.

Financial Institution

A deposit-holding institution providing financial services for its clients or members, with a license from the relevant national financial regulatory authority.

Financial literacy

Financial Service Providers (FSP’s) Global/ National Platforms

Livelihoods education Livelihood Skills

Minimum standards for Child Friendly products

CYFI is following the OECD Definition of financial literacy: “financial concepts, and the skills, motivation and confidence to apply such knowledge and understanding in order to make effective decisions across a range of financial contexts, to improve financial wellbeing of individuals and the society; and to enable participation in economic life,” OECD (2012). PISA 2012 Financial Literacy Framework, http://www. pisa.oecd.org/dataoecd/8/43/46962580.pdf Financial institutions which provide financial products including deposits Global and national efforts to further the Child and Youth Finance Movement nationally and globally. The aim of these platforms is to bring together experts and practitioners who will conduct activities to promote financial access and education for children and youth at the international and national levels Program or product aimed at developing employability skills and entrepreneurship behavior while allowing one to assess their personal skills, aspirations and life path “Capabilities, resources and opportunities to pursue individual and household economic goals. Livelihood skills relate to income generation and may include technical/vocational skills, job seeking skills, business management skills, entrepreneurial skills and money management skills.” (UNICEF (2011) Life skills Definition of Terms. http://www.unicef.org/lifeskills/index_7308.html) The standards a banking product must meet to be awarded Child Friendly Product Certificate as created by international financial regulators within the Movement’s Regulation Expert Council.

The entity responsible for coordinating the National Child and Youth Finance National Child and Youth Finance Advisory Committee. This is usually the Financial Regulator within a country.

Advisory Committee Coordinator Social education Social entrepreneurship

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Program or product aimed at affecting knowledge of human rights, encouraging self - reflection and self-awareness and respect for others and oneself.

The ability to recognize social, political or environmental needs and to use one's technical and business skills to create innovative solutions that meet these needs while at the same time generating sufficient social and financial capital.

Socio-financial capability

The ability to make informed financial decisions that benefit the individual and community.

Young People

Anyone between the ages of 10 and 24 (United Nations, http://www.un.org/esa/ socdev/unyin/qanda.htm)

Youth

An individual between the ages of 15 and 24 (United Nations, http://www.un.org/ esa/socdev/unyin/qanda.htm)

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Annex 1 Letter of Support from the United Nations Secretary General

THE SECRETARY-GENERAL

MESSAGE TO THE FIRST CHILD AND YOUTH FINANCE INTERNATIONAL SUMMIT Amsterdam, 3-4 April I am pleased to send greetings to all participants at this first-ever Child and Youth Finance International Summit.

The world now has some 1.2 billion youth, the largest such generation in history. Beyond sheer numbers, young people today are better connected and have more access to information than ever before. They are using powers of social networking to shape our collective future.

With the right support, today’s youth can also help advance the economic and social development of their communities and countries. Your summit is an opportunity to explore how to provide young people with the tools they need to optimize their contribution.

I strongly support helping young people gain greater financial literacy as well as better access to services that will lead the way to employment, entrepreneurship and investing opportunities.

At the same time, we must protect young people from exploitation by those who might prey on their lack of knowledge and savvy.

The United Nations is supporting these goals in a number of ways. The United Nations Children’s Fund (UNICEF) has partnered with Aflatoun Child Saving International and Child and Youth Finance International to promote curricula that facilitate learning social responsibility and financial competency. The United Nations Capital Development Fund (UNCDF), in partnership with the MasterCard Foundation, has developed an initiative called YouthStart to increase access to financial services for low-income youth in sub-Saharan Africa, with a focus on savings and financial education.

Investing in children and youth means helping them develop their potential. Beyond financial information and access, we must provide young people with a broad perspective on our world and their place in it as global citizens.

By raising a generation that has the ability to make the most of their resources as well as the wisdom and drive to contribute to sustainable development, we can lay the foundation for a better future for all.

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Annex 2

Compiled Information on Education Programs based on CYFI Education Survey 2011 Table 1 Outreach of Educational Programming by Gender Number of Children Male Reached through Educational Programming (Age)

Female

Percentage Female

5 and under

0

0

0

6 to 9

2292

2189

49%

10 to 14

20185

43200

68%

15 and up

53275

60338

53%

Table 2 Number of Programs by Number of Teaching Faculty

Table 3 Number of Programs by Number of Participating Schools

Total Number of Teachers Involved in Educational Programming

Number of Programs

Total Number of Schools Involved in Educational Programming

Number of Programs

0

23

0

25

1-50

4

1-50

6

51-100

3

51-100

1

100-250

1

100-250

1

250-500

1

250-500

1

501-1000

2

501-1000

2

1001-1500

2

1001-1500

0

1501-5000

1

1501-5000

2

5001-10000

2

5001+

4

10000+

3

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Table 4 Number of Programs by Number of Participating Non-Formal Educational Centers Total Number of Centers Involved in Non-Formal Educational Programming

0

0-10

11-50

51-250

250+

Number of Programs

37

2

0

0

3

Table 5 Number of Children Saving Formally and Non-Formally Formally

Non-Formally %Formal

Total Children in Programs

Total Number of Children 307686 Saving

1224053

0.200873648

18557787

Amount of Total Savings

by Children

10348775

0.495604932

10168426

Table 6 Number of Programs by Teacher/Family Savings Encouragement

Number of Programs

Encouragement of Teachers or Family Members to Save

No Encouragement of Teachers or Family Members to Save

Percent of Programs That Encourage Teachers/Family

10

32

23.81

Table 7 Educational Offering by Age Group

96

Age Group

I (5 years and under)

II (6-9 years)

III (10-14 years)

IV (15+ years)

Number of Programs

1

13

27

27

Children, Youth & Finance

Table 8 Number of Programs by Education Components Offered

Table 9 Number of Programs by Life Skills Education Components

Number of Programs

Life Skills Components

Number of Programs

All 3 Components

14

Gender equality

17

Life Skills and Financial

3

Self-esteem

18

Financial and Livelihood

4

Basic health

11

Life Skills and Livelihood

2

Stress management

4

Life Skills Only

4

Leadership

17

Financial Only

7

Conflict resolution

8

Livelihood Only

1

Environmental protection

12

Networking

9

Understanding basic rights

17

Table 10 Number of Programs by Financial Education Components

Table 11 Number of Programs by Livelihoods Education Components

Financial Components

Number of Programs

Livelihoods Components

Number of Programs

Saving Behaviour

27

Entrepreneurship (financial)

18

Financial risks

22

Entrepreneurship (social)

16

Prices + Value

22

Business plans

13

Numeral Skills

17

12

Financial negotiations

18

Respect for ethics and safety in business

Purchasing decisions

22

17

Financial service providers

20

Responsibility to self and the community

Taxes and Wages

10

Types of wages

9

Economic environment

19

Employability skills

14

Skills assessment

13

Career mapping

13

Types of Employment

15

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Annex 3

98

Organization Name

Research

Teacher training

Curriculum development

Teacher/Learner facilitation guide

Type of Organizational Work

Aflatoun

Aflatoun











Aflatoun (BRAC)

BRAC











Aflatoun (UNICEF)

UNICEF Nigeria









Aflatoun social and financial education program

Meljol









Balpanchayat. (childrens council)

Socio Economic Development Trust







Building Futures Project

Canadian Foundation for Economic Education



Child Social and Financial Education

ICS Asia



Educate! Social Entrepreneurship and Leadership Course, Social Entrepreneurship Clubs, Alumni Program

Educate!

Educated & Confident Children (6-14 years) and Skilled & Involved Youth (1524 years)

ChildFund International

Education and Youth Development Programming



























IREX









Education for All

UNICEF Mauritaie



Expanded and Sustained Access to Financial Services

Right to Play



Children, Youth & Finance



 





Other

Program Name

Tech. Assistance

Education Programming Index





Americas Asia Pacific Europe MENA

    















IV (15+ years) Life skills Financial education



III (1-14 years)



II (6-9 years)

I (5 years and older)

Africa

    

    

  

   

   

       

       

































Encourage Enterprise



Savings Component

Target Age Group

Livelihood education

Regions of Implementation Components of Education

  

 

  

   





















Children, Youth & Finance

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Financial Literacy Initiative

Financial Literacy Initiative



Funny Money for High Schools

Investor Education Fund

GFSItrust2

Green Forest Social Investment Trust

I can manage my money (Harnessing Financial Awareness among Young Men and Women)

Habitat Centre for Development and Governance





Irex2

IREX





JA Economics for Success

JA Worldwide



JA More than Money

JA Worldwide



Just Living (part of Building Young Futures)

UNICEF UK



Network for Teaching Entrepreneurship (NFTE)

Network for Teaching Entrepreneurship (NFTE)



Nibud2

Nationaal Instituut voor Budgetvoorlichting (Nibud)

(None)

Wilde Ganzen Ontwikkelingssamenwerking

Opportunity Passport

Jim Casey Youth Opportunities Initiative

Paying for It

Citizenship Foundation



Philosophy for children, enquiry based learning

Socio Economic Development Trust



Safe Shelter, Guidance and Schooling for Safe shelter etc - Lifetools Children in Need Around the World

100

Children, Youth & Finance

Other



Teacher/Learner facilitation guide

Right to Play

Curriculum development

Financial Fitness

Teacher training

Type of Organizational Work

Research

Organization Name

Tech. Assistance

Program Name











 



 













 



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 

 

 

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

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



   

 

 





IV (15+ years) Life skills Financial education

   

 







  

 

  

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





 



    

    

Encourage Enterprise



Savings Component

Target Age Group

Livelihood education

III (1-14 years)

II (6-9 years)

I (5 years and older)

MENA

Europe

Asia Pacific

Americas

Africa

Regions of Implementation Components of Education

 

 

 



 











Children, Youth & Finance

101

SoFEA-Bdesh_and_ELA-Uganda

BRAC

Street Source







Street Kids International







Street Work

Street Kids International







Supporting Girls to Gain Safe and Empowered Lives through Livelihoods and Protections Strategies

Making Cents International







Taking Stock in Your Future

Investor Education Fund

Valores de Futuro

P.A.U. Education

Various Child and Youth finance educational programmes

Nationaal Instituut voor Budgetvoorlichting (Nibud)

VECTOR

Canadian Foundation for Economic Education







WorldGranny Pension & Development Network

WorldGranny Pension & Development Network







Youth Social and Economic Empowerment Project

Green Forest Social Investment Trust

YouthSave Colombia

Save the Children



YouthSave Kenya

Save the Children



102

Children, Youth & Finance

Research



Tech. Assistance

Other

Population Council

Teacher/Learner facilitation guide

Siyakha Nentsha: Building economic, health, and social capabilities among highly vulnerable adolescents in KwaZulu-Natal, South Africa

Type of Organizational Work

Curriculum development

Organization Name

Teacher training

Program Name









 











 













 









Livelihood education Savings Component

Target Age Group

    

   

  

  

  

  

 

  

   

  

  

 



    























Encourage Enterprise

Financial education



Life skills



IV (15+ years)

III (1-14 years)

II (6-9 years)

I (5 years and older)

MENA

Europe

Asia Pacific

Americas

Africa

Regions of Implementation Components of Education



 

  

 







Children, Youth & Finance

103

104

Aflatoun (BRAC)

BRAC





Aflatoun (UNICEF)

UNICEF Nigeria









Aflatoun social and financial Meljol education program











Balpanchayat. (childrens council)

Socio Economic Development Trust











Building Futures Project

Canadian Foundation for Economic Education

Child Social and Financial Education

ICS Asia









Educate! Social Entrepreneurship and Leadership Course, Social Entrepreneurship Clubs, Alumni Program

Educate!

Educated & Confident Children (6-14 years) and Skilled & Involved Youth (15-24 years)

ChildFund International





Education and Youth Development Programming

IREX







 





Gender equality



Understanding basic rights



Networking



Environmental protection

Basic health

Aflatoun

Conflict resolution

Self-esteem

Aflatoun

Children, Youth & Finance

Life Skills/Social Education Components

Leadership

Organization Name

Stress management

Program Name

Gender equality

Components of Life Skills(Social), Financial, and Livelihoods Education Index















 

































Financial risks Prices + Value

  

    

  



















Financial service providers Taxes and Wages Economic environment Planning and budgeting Entrepreneurship (financial) Entrepreneurship (social) Business plans Respect for ethics and safety in business Responsibility to self and the community Types of wages Employment skills

           

     













 



         

    

  

   

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















  







Types of employment



Career mapping

Skills assessment

Purchasing decisions

Financial negotiations

Numeracy skills

Saving behaviour Financial Education Components Livelihoods Components

 

  

 





















Children, Youth & Finance

105

106

Right to Play

Financial Literacy Initiative

Financial Literacy Initiative

Funny Money for High Schools

Investor Education Fund

GFSItrust2

Green Forest Social Investment Trust

I can manage my money (Harnessing Financial Awareness among Young Men and Women)

Habitat Centre for Development and Governance

Irex2

IREX

JA Economics for Success

JA Worldwide

JA More than Money

JA Worldwide

Just Living (part of Building Young Futures)

UNICEF UK

Network for Teaching Entrepreneurship (NFTE)

Network for Teaching Entrepreneurship (NFTE)

Nibud2

Nationaal Instituut voor Budgetvoorlichting (Nibud)

(None)

Wilde Ganzen Ontwikkelingssamenwerking

Opportunity Passport

Jim Casey Youth Opportunities Initiative

Paying for It

Citizenship Foundation

Children, Youth & Finance









 

Networking



Gender equality

Financial Fitness





Understanding basic rights

Expanded and Sustained Right to Play Access to Financial Services

Environmental protection



Conflict resolution



Leadership



Stress management

UNICEF Mauritaie

Basic health

Education for All

Life Skills/Social Education Components

Self-esteem

Organization Name

Gender equality

Program Name















 









 





 

 

 

  

   

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















  





Skills assessment

 





  







Types of employment

Employment skills

Types of wages

Responsibility to self and the community

Respect for ethics and safety in business

Business plans

Entrepreneurship (social)

Entrepreneurship (financial)

Planning and budgeting



Career mapping



Economic environment

Taxes and Wages

Financial service providers



Purchasing decisions

Financial negotiations

Numeracy skills

Prices + Value

Financial risks

Saving behaviour Financial Education Components Livelihoods Components

 







Children, Youth & Finance

107





Population Council Siyakha Nentsha: Building economic, health, and social capabilities among highly vulnerable adolescents in KwaZulu-Natal, South Africa









SoFEA-Bdesh_and_ELAUganda

BRAC





Street Source

Street Kids International

Street Work

Street Kids International

Supporting Girls to Gain Safe and Empowered Lives through Livelihoods and Protections Strategies

Making Cents International

Taking Stock in Your Future

Investor Education Fund

Valores de Futuro

P.A.U. Education

Various Child and Youth finance educational programmes

Nationaal Instituut voor Budgetvoorlichting (Nibud)

VECTOR

Canadian Foundation for Economic Education

WorldGranny Pension & Development Network

WorldGranny Pension & Development Network





Youth Social and Economic Empowerment Project

Green Forest Social Investment Trust





YouthSave Colombia

Save the Children

YouthSave Kenya

Save the Children

108

Children, Youth & Finance







 



Gender equality



Understanding basic rights



Networking

Safe shelter etc - Lifetools



Environmental protection

Safe Shelter, Guidance and Schooling for Children in Need Around the World



Conflict resolution



Leadership

Socio Economic Development Trust

Stress management

Philosophy for children, enquiry based learning

Basic health

Life Skills/Social Education Components

Self-esteem

Organization Name

Gender equality

Program Name







































 













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

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

 



 



 

 























Business plans

   

   









 

 















































 



























 

 

 



Career mapping Types of employment



Skills assessment

Employment skills

Types of wages

Responsibility to self and the community

Respect for ethics and safety in business

Entrepreneurship (social)



Entrepreneurship (financial)



Planning and budgeting

Economic environment

Taxes and Wages

Financial service providers

Purchasing decisions

Financial negotiations

Numeracy skills

Prices + Value

Financial risks

Saving behaviour Financial Education Components Livelihoods Components

  









  















Children, Youth & Finance

109

Annex 4

Banks Participating in the Banking Survey Akb Sviaz-Bank Russia ANZ Australia Association of Asian Confederation Of Credit Unions Thailand Bank of China (Hong Kong) China Bank Simpanan Nasional Malaysia Banque De Luxembourg Luxembourg BBVA Spain Caja Madrid Spain Citibank Korea Commonwealth Bank Of Australia Australia Credit Suisse (Microfinance Capacity Building Initiative) Swizerland Credit Union Foundation Australia Australia Credit Union League Of Hong Kong China Danske Bank Denmark Danske Bankas Lithuania Dexia Luxembourg Ecobank Mali Mali Equity Bank Kenya Equity Group Foundation Kenya Erste Group Bank Ag Austria Federacion Peruana De Cajas Municipales Peru Gazprombank Russia ING Luxembourg Kompanion Kyrgyzstan National Bank Of Egypt Egypt National Banking And Securities Commission Mexico National Confederation Of Cooperatives (NATCCO) Philippines National Irish Bank Ireland

110

Children, Youth & Finance

NB Trast Russia Nordea Bank Russia Nueva Segovia Consortium Of Cooperatives (NSCC) Philippines Postbank South Africa South Africa Postbank Uganda Uganda Rabobank Netherlands Netherlands Reseau Des Caisses D’épargne Et Crédit Du Mali (Nyèsigiso) Mali Rosbank Russia Rosselhoz Bank Russia Rus Bank Russia Savings Banks Foundation For International Cooperation Germany Sberbank Of Russia Russia Scotiabank El Salvador Spectrum Federal Credit Union United States Swedbank Sweden The Bank of Moscow Russia The Cooperative Credit Union League Of Bangladesh Ltd. (CCULB) Bangladesh UNCDF Senegal Uniastrum Bank Russia Unicredit Bank Russia Unifim Mexico Vancity Canada Vietnam Postal Savings Service Company Vietnam VTB24 Russia Xacbank Mongolia Zenit Bank Russia

Annex 5

Global Banking Restrictions on Children and Youth Country

Minimum age to open an independent bank account

Independent account for minor1

Youth control2

Armenia

18

X

Austria

18

X

Bangladesh

18

0

Belgium

18

X

Bolivia

18

X

Brazil

18

X

Chile

18

X

China

16

√ if above 16

Egypt

16

√ if above 16

Germany

18

X

Greece

18

X

India

10

√

√

Japan

20

√ with parental consent

X

Luxembourgh

15

√ with parental consent

X

Malawi

18

X

Malaysia

18

X

Mozambique

Not standardized

√ with parental consent

√

Netherlands

18

√ with parental consent

X

Norway

18

X

Pakistan

18

X

Peru

18

X

Philippines

Not standardized, but generally 7

√

√

Poland

18

√ at 13 years old with parental consent

X

Romania

14

√ at 14 years old

√

Russia

14

√ at 14 years old

√

Singapore

21

X

South Africa

Not standardized, but generally 18

X

Spain

18

X

Sri Lanka

7

√

Turkey

18

X

Ukraine

14

United Arab Emirates

18

United Kingdom

7

Uzbekistan

18

√ at 14 years old

√ X

√ with parental consent

√ X

Source: Child and Youth Finance International Short Report on Clifford Chance Research on Financial Inclusion 1

For all countries listed here except Egypt and Singapore (21 years), Scotland (16 years) and Japan (20 years) the legal age of majority is 18.

√ = Youth can access account without guardian permission and guardian cannot access account without youth permission; X = Either guardian controls how account is set up or youth cannot ccess account without guardian permission and guardian can access account without youth permission; 0 = No consistent regulation.

2

Children, Youth & Finance

111

112

Children, Youth & Finance

Children, Youth & Finance 2011

Child and Youth Finance International PO Box 16524 1001 RA Amsterdam Netherlands + 31(0)20 5203900

Child and Youth Finance International (CYFI) lead the world’s most extensive child and youth finance Network, that together makes up the Child and Youth Finance Movement. We connect Ministries and Governments, CEOs, heads of NGOs, financial institutions and children. By aligning and coordinating efforts of organizations all over the world the Movement is able to share resources, model best practices and empower each other to reach the target of the Movement: Reaching 100 million children in 100 countries by 2015 with financial inclusion and financial education to make sure that every child and youth have access to a basic savings account and the financial knowledge and skills needed to operate this account. By doing this we aim to give the adults of tomorrow the tools to lead lives free from poverty and financial instability.

Stay connected with us Website: www.childfinanceinternational.org Facebook: ChildFinance Twitter: ChildFinance LinkedIn: Child and Youth Finance International To read our publications, please visit: www.childfinanceinternational.org/movement/publications

Global Money Week

Global Money Week is a global celebration that is taking place in the second week of March each year. The Week engages children and youth worldwide in learning how money works, including saving, creating livelihoods, gaining employment, and entrepreneurship. Countries and organizations all over the world participate by engaging children and youth in activities such as global web chats, visits to banks, ringing the bells at the stock exchange, radio shows and cartoons and much more.

Stay connected with us Website: www.globalmoneyweek.org Facebook: Global Money Week Twitter: GlobalMoneyWeek

Finance & Me

Finance & Me is a platform initiated by Child and Youth Finance for children and youth to take action in reshaping the future of finance. It allows for youngsters to stay informed about the latest Child and Youth Finance Movement activities going on around the globe so they can remain active and involved in the Movement. Finance & Me also serves as a bridge between young people and adults as children and youth are encouraged to utilize this platform to share their experiences and voice their opinions.

Stay connected with us Website: www.financeandme.org Facebook: Finance & Me Twitter: FinanceandMe

YouthTech

YouthTech is a blog where Child and Youth Finance International (CYFI) shares technological innovations around the topic of financial inclusion and education for children and youth. It provides a platform where experts within the CYFI network and beyond engage in discussions about the potentials of technology in enhancing financial capability of children and youth. Moreover, YouthTech also serves to share best practices and to document how technology is shaping the Child and Youth Finance Movement. We hope this will contribute to the understanding of what is needed for technology to make a difference in the current financial inclusion and education landscape and the ways of turning it into a reality.

Stay connected on the blog: www.youthtech.info