2017 ─ SchoolBanking: unleashing the youth financial services market

7 January 2017

SchoolBanking: unleashing the youth financial services market Best practice from public private partnerships in advancing financial inclusion of young people

1

Contents Preface……………………………………………………………………………………………………………………………………………………..………………………………………………………….3

1.

Introduction………………………………………………………………………………………………………………………………………………………………………….……………….4

2.

Background…………………………………………………………………………………………………………………………………………………………………………………………….4

2.1. Relevance of financial education and financial access for young people……………………………………………………………….….4 2.2. Evidence on effective financial education intervention and link to formal access……………………………………………………..5

3.

How to bank children and youth……………………………………………………………………………………………………………………………………………7

3.1. A historical perspective………………………………………………………………………………………………………………………………………………………..………………………7 3.2. Growth rates of the SchoolBank programs……………………………………………………………………………………………..…………………………………..………..8 3.3. Costs and benefits of investing in youth…………………………………………………………………………………………...……………………………………….…………..9

4.

Case examples 11

4.1.

4.2.

4.3.

4.4.

4.5.

4.6.

4.7.

The German Savings Banks…………………………………………………………………………………………………………..……………………………………………….…………11 Government Savings Bank Thailand……………………………………………………………………………………………..………………………………………..……….……12 Bank Simpanan Nasional (BSN), Malaysia……………………………………………………………………………………………………………..……………..……….……14 Kenya Post Office Savings Bank…………………………………………………………………………………………………………..…………………..….…….………..…………15 Banco Estado, Chile…………………………………………………………………………………………….……………………………..………………………..……..…………..…………16 Impact assessments……………………………………………………………………………………………………………………………..………………..…..…..…………………………17 Critical success factors……………………………………………………………………………………………………………………..………………..………….………..……..…………17

5. Barriers to youth financial inclusion…………………………………………………………………………..………………………………....………………..…18 6. Conclusions…………………………………………………………………………………………..………………..……………..………………..………………..…………..……………..21 7. Bibliography…………………………………………………………………………..……………………..………………..………………………..………...……………..……………………..22

2

Preface Learning to handle one’s personal finances begins at an early age. Throughout the world, young people are first exposed to budgeting, spending and saving within their homes, amongst their peers, on the internet and as well in their communities.

However, another powerful path to learning about personal finance is the classroom. This study attempts to shed light on how learning in the classroom works in countries around the world through a program called SchoolBank. A global effort aimed at boosting financial inclusion of children and young people through the school system, SchoolBank takes an innovative multi-stakeholder approach that includes locally focused banks and educators. To develop the next generation of economic citizens, the program focuses on school adoption. Teachers play an important part, especially when it comes to Economic Citizenship Education (ECE)1.

Through the program, children and youth are given a Child & Youth Friendly bank account, oftentimes their first contact with a bank and first vehicle to save money. Along with the account, SchoolBank looks to impart the right education to teach them why and how to save and what their economic rights are.

Child and Youth Finance International (CYFI) and the World Savings and Retail Banking Institute (WSBI) are convinced that SchoolBanking promotes a better understanding and more active use of financial services through the financial education and inclusion of children and young people.

This publication aims to describe the different models and approaches to SchoolBanking through the long tradition of such activities carried out by WSBI members, in the past and present, as well through CYFI’s current work in this area.

The objective is to: 

Raise awareness and to provide an easily accessible and strong knowledge base, which will inspire and encourage additional financial institutions to become involved in SchoolBank projects around the world  Highlight the role that SchoolBank can play in promoting financial inclusion for children and youth within the broader context of “Full Economic Citizenship” for the next generation, an objective that stands at the very core of the CYFI strategy and activities Furthermore, this publication forms part of joint activities taking place within the framework of a Memorandum of Understanding concluded between CYFI and WSBI in April 2015. We extend our gratitude to the WSBI member banks: German Savings Banks Association via Bildungsmedien (as part of the DSV-Group), Government Savings Bank of Thailand, Malaysia's Bank Simpanan Nasional, Kenya Post Office Saving Bank and Banco Estado in Chile. We would further like to thank Bianca Isaincu, Fiona Joyce, James Pieper, Kimberly DeRose and Weselina Angelow for bringing this publication to life.

With this study, we demonstrate to policymakers and stakeholders that SchoolBank is a proven way to inform and educate people at a young age about financial principles that they can carry with them throughout their lives.

Jeroo Billimoria Founder, CYFI

Chris De Noose Managing Director, WSBI

WSBI – The Global Voice of Savings and Retail Banking WSBI represents the interests of 6,000 savings and retail banks globally, with total assets of $17 trillion and serving more than 1.3 billion customers in around 80 countries (as of 2014). WSBI focuses on international regulatory issues that affect the savings and retail banking industry. It supports the aims of the G20 in achieving sustainable, inclusive, and balanced growth, and job creation, whether in industrialized or less developed countries. WSBI favors an inclusive form of globalization that is just and fair, supporting international efforts to advance financial access and financial usage for everyone.

CYFI - Empowering Youth with Financial Access, Knowledge and Skills Child and Youth Finance International (CYFI) is an Amsterdam-based international NGO which aims to empower all children and youth around the world, particularly those who are vulnerable and marginalized, through an enhancement of their economic citizenship. This entails increasing their financial capability, improving their awareness of social and economic rights and their access to appropriate financial services in order to build their assets and invest in their own futures.

1

Child and Youth Finance International (2012) A Guide to Economic Citizenship Education: https://issuu.com/childfinanceinternational/docs/a-guide-toeconomic-citizenship-education-cyfi/1?e=7128000/2519036 3

1. Introduction As major drivers of the SchoolBank, CYFI and WSBI have worked together to promote and implement the program in schools where pupils, in most cases, are below 18 years of age. This paper summarizes data collected from five WSBI members who have kindly provided data that offers a unique and rich source of quantitative information that has been dissected and summarized in this paper. We use interchangeably the terms “youth”, “young people” and “younger generation” and “children” as the age of pupils range between 7 and 21 for the country examples used, however different definitions for young people vary within different national contexts.

From the data, WSBI and CYFI describe why it is important for the children and youth to have access to savings from a young age to be banked. Second, the paper lays out the necessary conditions a system should present so that it enables financial access to youth. The paper also presents one specific way in which youth could be banked – the SchoolBank model – which has been a tradition for many years with the savings banks. As demonstrated through the piece, practices from each country have varying characteristics. Finally, the critical success factors, challenges and potential solutions are presented based on the analyzed case studies. Learning to handle one’s personal finances starts at an early age.

2. Background 2.1 Relevance of financial education and financial access for young people For children and youth both in and out of school, developing the knowledge and ability to manage one’s own money is crucial. Financial capability, as defined by the World Bank2, is: The internal capacity to act in one’s best financial interest, given socio-economic environmental conditions. It encompasses the knowledge (literacy), attitudes, skills and behaviors of consumers with regard to managing their resources, and understanding, selecting, and making use of financial services that fit their needs.

The importance of financial capability of young people has been recognized by a number of international organizations3, public authorities, and development organizations as an essential component to achieve full economic and social potential of the next generation of young people. As outlined also in the OECD PISA Financial Literacy Framework, financial education should give children a better understanding and knowledge of “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.”4 In the last decade alone, as pointed out by the OECD International Network on Financial Education in 20065, the financial environment has become more complex but also more accessible. While the barriers in accessing financial products and services are being lowered as a result to widespread innovations such as mobile money, online access and “fintech” solutions, there has also been an increase and a shift in the responsibilities from the financial sector towards the end consumers. This trend is most prevalent for the young generation, as today’s youth are a generation of digital natives. In this context, financial education, alongside with consumer protection, has become one of the highest priorities on the agendas of financial regulatory authorities all around the world 6.

From one perspective, actions to enhance the financial capabilities of consumers are driven from a consumer protection logic (more complex products require informed and financially capable individuals). However, on the other, a wide array of literature outlining the benefits of financial inclusion and education at the individual and microeconomic level has further incentivized public and private organizations to focus on providing financial education courses, especially targeted to young people.

2

World Bank (2013) Financial Capability Surveys Around the World: http://responsiblefinance.worldbank.org/~/media/GIAWB/FL/Documents/Publications/Why-financial-capability-is-important.pdf 3 For more information, please refer to https://issuu.com/childfinanceinternational/docs/cyfi-ece-landscape 4 According to the CYFI theory of change, financial capability has both individual and structural components. It combines a person’s ability to act with the opportunity to act. To be financially capable, people must have financial knowledge and skills as well as access to appropriate financial services to enhance social and economic well-being. While empowerment is portrayed as a separate construct in the CYFI model of economic citizenship, financial capability actually incorporates empowerment at the individual level and access and opportunity at the structural level. Essentially, financial capability occurs when young people are personally empowered and simultaneously experience financial inclusion, or real access to appropriate financial products and services along with the opportunity to practice using those services 5 http://www.oecd.org/finance/financial-education/improvingfinancialliteracyanalysisofissuesandpolicies.htm 6 Please refer to the Global Partnership for Financial Inclusion for an extensive overview of documentation http://www.gpfi.org/. Other useful links: http://www.afi-global.org/ & http://www.financial-education.org/join_INFE.html 4

“Equipping citizens with the skills necessary to achieve their full potential, participate in an increasingly interconnected global economy, and ultimately convert better jobs into better lives is a central preoccupation of policy makers around the world” Mr. Angel Gurria, Secretary General, OECD Investments in financial education programs have seen a definite increase in the last few years. Efforts to measure the effectiveness of implemented programs or impact on the knowledge of the treated groups are imperative for the governmental accountability check. Today, however, very few countries around the world are tracking the level of financial literacy of their overall population, and even less so of the youth in their countries. Moreover, national data is often inconsistent therefore it is difficult to draw comparisons between one country and another. One attempt to overcome this gap is the OECD’s International Student Assessment (PISA) of 15-year-olds which, since 2012, includes questions to assess the knowledge, skills and attitudes of students towards money matters. Currently, however, only a limited number of countries participate in this assessment. In 2012, 65 countries7 took part in the PISA assessment, with 18 countries and economies whose students participated in an optional financial literacy assessment “Students and Money”: Australia, the Flemish Community of Belgium, the Czech Republic, Estonia, France, Israel, Italy, New Zealand, Poland, the Slovak Republic, Slovenia, Spain and the United States; and five partner countries and economies whose students participated: Colombia, Croatia, Latvia, the Russian Federation and China (Shanghai). The “Students and Money” assessment was developed to determine the extent to which students in the 18 participating countries and economies have the knowledge and skills that are essential to make financial decisions and plans for their future 8. We hope that in the future such assessments will be conducted in more economies, as such assessments will be able to guide effective public interventions.

2.2 Evidence on effective financial education intervention and link to formal access Although there is not a single formula for effective and efficient financial education programs, nor rigorous studies (such as randomized controlled trials) that have proven what can influence the development of savings habits in children, there are many pointers to what can be influential.

Figure 1 – What we know in terms of effective interventions for youth financial capability

Trilogy approach

Start as early as possible

•Financial education, financial inclusion and consumer protection are complementary and necessary - one cannot exist without the other

•Most efficient intervention in respect to long term benefits •Habits are formed at a young age (studies suggest at age seven) •Younger youth save more than older youth

When possible - start in schools

•Most cost efficient way of reaching children •Erases the differences amongst children with different backgrounds •Improves living standards

Learning by doing: it works

•Students that hold a bank account score 21 points highter than students who do not (after accounting for socio-economic status) PISA2012 •Parents become involved and included financially

Asset building and long term effects

•Literature and studies suggest that having a savings account as an adolescent is related to saving in young adulthood and adulthood •Macro-economic benefits for the domestic savings rates of countries

Source: YouthStart 2015; Friedline, Elliot, Chowa 2013; Omunjala, Fonda 2014; Dupas, Robinson 2013; The MasterCard Foundation 2015

7 2012 Pisa Countries: Albania, Argentina, Australia, Austria, Belgium, Brazil, Bulgaria, Canada, Chile, Colombia, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong-China, Hungary, Iceland, Indonesia, Ireland, Israel, Italy, Japan, Jordan, Kazakhstan, Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Macao-China, Malaysia, Mexico, Republic of Montenegro, Netherlands, New Zealand, Norway, Peru, Poland, Portugal, Qatar, Romania, Russian Federation, Republic of Serbia, Shanghai (China), Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Chinese Taipei, Thailand, Tunisia, Turkey, UAE, United Kingdom, United States, Uruguay, Vietnam 8 OECD (2013), PISA 2012 ASSESSMENT AND ANALYTICAL FRAMEWORK http://www.oecd.org/finance/financialeducation/PISA2012FrameworkLiteracy.pdf

5

For young people, financial education should start as early as the age of seven9, as this is a crucial age in relation to forming habits and, as recommended by the OECD10, financial education should begin in schools. Introducing financial education in schools is important as “building financial education into curriculums from an early age allows children to acquire the knowledge and skills to build responsible financial behavior throughout each stage of their education.”11 Amongst the reasons for introducing financial education in schools are: 

New generations are bearing more financial risks than previous ones while products are becoming more complex Students make important financial decisions at younger age  Young generations are less financially capable than their elders  Parents are not necessarily well equipped to develop appropriate financial skills of their children  Financial literacy levels are correlated with socio economic status: inequalities are reproduced and amplified overtime12 

Figure 2 – Evidence on benefits of financial access for children and youth Evidence on the financial access of children and youth, and positive outcomes appear to fall into six broad categories:      

Economic and financial well-being (Key evidence by Ssewamala, Elliott and Friedline) Financial knowledge and skills (Adams and Sherraden) Psychological health (Sebstad, Ssewamala) Reproductive and sexual health (Austrian, Erulkar) Academic achievement (Friedline and Elliott) Education attainment and expectations (Elliott and Beverly)

Source: Children, Youth & Finance, Child & Youth Finance International

Not only should financial education begin early and, if possible, be taught in schools, but CYFI and WSBI strongly believe that financial education should be also complemented with youth financial access. Appropriate and inclusive financial services for youth can equip young people with the resources and support they need to become productive and economically active members of their households and communities as they make the transition from childhood to adulthood13.

Furthermore, studies completed in the United States14 and elsewhere15 also suggest that a combination between financial education and access would be the most beneficial in terms of behavioral change and acquired knowledge retention,16 as behaviors that are developed at a young age are likely to influence one’s actions later in life. The desire to see financial education combined with financial inclusion can also be justified through experiential learning theory17.

9

Dr. David Whitebread and Dr. Sue Bingham, Habit Formation and Learning in Young Children, Money Advice Service, May 2013 OECD (2006) The Importance of Financial Education http://www.oecd.org/finance/financial-education/37087833.pdf 11 OECD (2012) Financial Education in Schools http://www.oecd.org/daf/fin/financial-education/FinEdSchool_web.pdf 12 http://www.oecd.org/finance/financial-education/48211770.pdf 13 Making Cents International. State of the Field in Youth Enterprise, Employment and Livelihoods Development: Programming and Policymaking in Youth Enterprise, Employment & Livelihoods Development. Lessons from Making Cents International’s 2009 Global Youth Enterprise Conference.

Washington, DC: Making Cents International. 2010. Accessed on-line at: http://www.youthenterpriseconference.org/SiteManager/CuteEditor_Files/uploads/MakingCentsInternationalStateoftheFieldPublication2009Bookmar ked.pdf 14 CFED (2014) Financial Education and Account Access Among Elementary Students, https://www.treasury.gov/resource-center/financialeducation/Documents/AFCO%20Youth%20Research%20Brief.pdf 15 Child and Youth Finance (2016) Financial Inclusion for Children and Youth: https://issuu.com/childfinanceinternational/docs/cyfi-financial-inclusionlandscape/1?e=7128000/37817487 16 For a review on the evidence, please see https://openknowledge.worldbank.org/bitstream/handle/10986/16833/WPS6745.pdf?sequence=1&isAllowed=y 17 Glassman, M. (2001) Dewey and Vygotsky. “Society, experience and inquiry in educational practice”, 60 Developing Quality Financial, Social and Livelihoods Education for Children and Youth Educational Researcher Volume 30, No.4, pp. 3-14.

10

6

Experiential Learning Theory First described by American educator John Dewey, and later expanded on by theorists such as David Kolb and Paolo Friere, experiential learning theory believes that: True knowledge comes through the ability to apply and reflect on certain learning outcomes and acquired skills in real-world setting and that constant experience and reflection is essential for children and youth to fully engage in their surroundings and become active agents in determining their own future.18 In other words, experiential learning theory emphasizes that the possibility to practice what one learns will have a positive effect on knowledge retention.

Based on this perspective, it would be reasonable to believe that effective programs for increasing responsible savings behavior of young people with a long-lasting effect should have the following characteristics (although no rigorous study such as randomized controlled trials have proven this in any context neither in the developed or developing world): 

Combine financial education with access in the appropriate consumer protection framework (including child-friendly banking products adapted to the needs of the youth);  Begin as early as possible and be continuous (ideally from the age of seven and continue throughout the school life);  Be taught in schools (in order to erase the background inequalities).

Seemingly, the potential to implement such programs relies on a multi-stakeholder and systemic approach to financial education and financial inclusion, including educators, financial service providers and financial regulators. In such an approach, the educators are closely working with the financial service providers with the oversight of the financial regulator, to deliver financial education and experiential learning opportunities in the school premises. There are many challenges automatically associated with the implementation of such a program: overloaded curricula, difficulty for financial institutions to work with Ministries of Education and with schools directly, cultural barriers and challenges in convincing parents of the importance of their children to learn about financial matters from a young age, regulatory barriers for youth to have financial access, lack of appropriate consumer protection frameworks which can protect the young clients as well as lack of a business case for financial institutions to invest in child-friendly banking products.

However, despite such barriers, CYFI and WSBI have identified cases and variations of successful examples, which have been implemented in diverse contexts by savings banks around the world and in which most of these challenges have been overcome. Although no rigorous assessments on the impact on the long-term behavior of the children and youth involved in these projects have yet been performed, the existence of such programs for a consistent number of years and their popularity within the schools, children and the families, has lead us to believe that, overall, the programs are effective interventions.

3. How to bank children and youth 3.1 A historical perspective The savings bank concept is a European idea with ideological roots reaching back to the 18th century and based on the principle of self-help and the conviction that it was of utmost importance for individuals to be responsible for organizing their lives. In the 18th century, several initiatives were taken to carry out this task. For example, joint savings schemes were created in Great Britain by the “box clubs” and the “local friendly societies”, followed shortly after by the establishment of savings banks. The first initiatives to establish savings banks were private, and the first real savings bank was founded in Hamburg, Germany in 1778.19 The next savings banks were established in the United Kingdom, in Tottenham in 1801, and the Ruthwell Savings Bank established in Scotland by Rev. Henry Duncan in 1810. This movement continued to spread across Europe as well as to the United States throughout the rest of the century. The rationale was that the social elite became aware of the economic and social problems resulting from the proletarian process, and tried to cultivate a new economic “morality” of work, thrift and virtue. The idea gained ground that saving could contribute to stabilizing the social order,20 explaining the growing interest of government agencies in savings banks as well as the social mandate that has been given to many government owned banks across the world since. This movement went hand in

18

Ibid http://www.savings-banks.com/About-us/History/Pages/portal.aspx 20 http://www.savings-banks.com/About-us/History/Pages/portal.aspx 19

7

hand with initiatives to start savings banking in schools. The first SchoolBank was started in France in 1834, and momentum then spread across many other European countries including Belgium, England, Austria, Germany, Russia, the Scandinavian countries, Switzerland, Brazil, Chile and to the United States during the rest of the 19th and beginning of the 20th centuries. The three primary methods of collecting and banking children’s savings in School Savings Banks were variations on the following: 

The direct type or passbook where money was received from the pupil and credited on a card or passbook A stamp card or exchange system under which a pupil was given a stamp equal to his/her deposit, which could be taken to the bank to get money or credit in return  The automatic receiving teller, similar to a gum slot machine or school savings boxes, in which pupils could deposit their coins into receptacles that had been allocated to them 

A commitment to financial inclusion and financial education is a key part of the mandate of the savings banks and there is a generally accepted recognition of the fact that education and the promotion of good savings habits and behaviour at a young age are key factors to combat poverty and achieve social and financial inclusion. It therefore comes as no surprise that the tradition of SchoolBank has always been very strong among savings banks, mutual and government backed banks that share a social mandate or public mission. The concept behind SchoolBank is not new - indeed it has been around for over 180 years, almost two centuries. Although it has had its origins in Europe, the SchoolBank concept has spread to many countries worldwide in the intervening decades. Financial inclusion and financial education, starting with instilling a good savings habit and imparting knowledge about how to manage one’s money and accumulate a buffer for a rainy day or a future life project, remains as relevant today as it was in the past in all parts of the world.

Although implementation details can vary across countries and geographies to fit the local and national context (including national regulation), SchoolBank models could be applied in most parts of the world, as the five case studies from the WSBI members demonstrate.

SchoolBank Models With the development of financial sectors and the diversification of financial products, as well as with the integration of technology into traditional banking methods, today’s SchoolBank models have a series of characteristics which involve technology and facilitated access to savings accounts and financial education. The models for implementing the SchoolBank concept vary from country to country depending on issues such as the governmental stance on financial inclusion and education, the interest and involvement of important stakeholders and partners such as government departments, schools, financial institutions as well as the involvement of local NGO’s and other stakeholders involved in financial inclusion and education initiatives in the country. However, SchoolBank today consists of three critical elements that are required to enable children and youth to save, receive and spend money wisely: 

Allowing children to open a bank account where the school acts as a proxy bank, an intermediary between the bank and the child, or where the school provides the facilities for direct banking;  Accompanying educational inputs of financial education (Economic Citizenship Education and financial awareness);  Ongoing transaction support By implementing models which encompassed the three elements above, the WSBI member banks were able to overcome the barriers to serve youth using innovative solutions and collaborative approaches.

3.2 Growth rates of the SchoolBank programs The five examples of Schoolbank examined in this paper (Chile, Germany, Kenya, Malaysia and Thailand) each has its own characteristics representing a specific part of the world, though each of the projects has a common thread of a continuous commitment from the savings banks to improve programs and to tailor the programs to better serve their young clients. Furthermore, each of these examples have seen an increase in the number of savings accounts opened through the Schoolbank projects. Most of the presented cases are focusing on improving the savings habits amongst very young children, starting at seven years of age until 17 to 20.

Although approaches to schoolbank vary from country to country based on context, culture and even regulation, in all the cases examined we see a stable increase of the number of schools involved in the programs throughout the years, a stable increase of the number of banking accounts as well as a stable increase of the total savings gathered in the youth accounts (Table 3). The Governments Savings Bank of Thailand (GSB), for example, reports an average increase in the number of students involved in school banking between 2011 and 2015 of about 182,122 students per year, which cumulatively, covers around 2.1 million students – equivalent to 11% of the Thai student population. In Malaysia, the Schoolchildren Savings Scheme covered 20% of the overall enrolled children in primary school in 2015.

8

Table 3 – Numerical figure of the analysed SchoolBank projects 2015 Country

Number of accounts

Number of students

Thailand

2,194,257

2,143,259

1,086

€25 million

916,724

916,724

7,352

€131 million

Chile

n/a

1,840

13

€10.4 million

Kenya

114,439

114,267

4,120

€1.25 million

Almost 70% of < 13

n/a

n/a

€2.77 billion

Malaysia (SGSP)

Germany

Number of schools

Total savings balances

Source: Data collected from presented partners in the study

In Germany, where financial inclusion is almost universal (99% of all German households have a current account, with an average balance of €3,460 and 78% of all households have a savings account with an average balance €22,61021), children also are keen savers. Children between the ages of six and nine have access to €18.13 each month, either as pocket money or gifts of money. For 10 to 13 years of age, the figure is €33.34. In both age groups, more than 60% of the children and young people surveyed had a firm goal in mind for their savings, for which they intended to use either part (55.4%) or all (4.5%) of their money. To do this, they use a savings or current account. Furthermore, 60.5% of children between the ages of six and nine have their own passbook or current account22. Between the ages of 10 and 13 this rises to 69.9%. The average balance held in a savings or current account is €660 for six to nine-year-olds and €800 for children between 10 and 13. If looking at these figures combined, German children between the ages of six and 13 hold a total of €2.77bn, hence, already making an economic impact.

3.3 Costs and benefits of investing in youth WBSI members have a long term commitment to increasing financial inclusion and a positive attitude towards a saving culture amongst young clients. Undoubtedly, this commitment comes with costs, which the savings banks are ready to support. For instance, GSB provides financial support to each new school that enrols in the program, which leads to a continuous increase not only of the savings and savings accounts opened by the young people, but also of the budget which is allocated to a SchoolBank programs (the increase between 2011 and 2014 was from approx. US$1.3 million to US$1.5 million).

In 2015, the German savings banks committed more than €6 million to the savings banks school service. These efforts are supported in part by the savings bank foundations (Sparkassenstiftungen), which focus on educational activities.

However, the detailed SchoolBank concepts may vary from one institution to another, as each savings bank must decide for itself how it would like to proceed with a SchoolBank project based on the opportunities, needs of population and the business case it sees in relation to the project as well as on how much of the bank’s budget will be allocated towards the school service.

According to CYFI, the business case for financial institutions to invest in youth financial products is based on four pillars (see figure 1): 1.

2.

3.

4.

Clear financial case Implementation challenging but feasible Opportunity cost Corporate social responsibility

However, notwithstanding the costs of the projects, the savings banks’ commitment for investing in the financial inclusion of youth is driven primarily by the willingness to fulfil a public mission, but also by the intention to expand and retain a customer base which will be critical for future growth of the institution. Banco Estado in Chile, for example, sees its programs aimed at children’s savings as an opportunity to contribute to the Chilean national strategy on financial inclusion and to collaborate with different public institutions such as the Solidarity and Social Investment Fund to further strengthen financial inclusion within the country. Additionally, as reported by Kenya Post Office Savings Bank, 21

According to a study by the German Bundesbank from 2010 and 2011, “Private households and their finances”, data as at February 2013, published in German on 21.3.2013 as “Private Haushalte und ihre Finanzen” 22 According to the 2015 Kids’ Consumer Analysis (KidsVerbraucheranalyse) by Egmont Ehapa Media 9

SchoolBank programs serve as a means of improving the bankâ&#x20AC;&#x2122;s image by repositioning the bank as a bank for young people (while prior to the participation in the project, the bank was associated with older clientele and pensioners).

Furthermore, each of the banks highlighted in this paper which invest in child savings accounts report to have seen an increase in both local and international recognition of their role and activities in banking the unbanked, which ultimately positively impacted the banksâ&#x20AC;&#x2122; image with current and potential customers as well as their business opportunities.

The case for child and youth friendly products is built on four pillars

10

4 Case examples 4.1 The German Savings Banks Country

Germany

Organization

The German Savings Banks

Program Name

Sparkassen-SchulService

Age groups

7-18 years old

Overview

The Sparkassen-SchulService project supports schools in teaching children and young people about financial education, as well as about how can they become more financially capable and mature citizens.

Partners involved

German Savings Banks Association & German Savings Banks Finance Group

Project objective

The goal of the Sparkassen-SchulService is to support schools in teaching children and young people to become financially capable, mature citizens, to prepare young people for the world of finance and work, to generate awareness around economic matters and to promote general financial literacy.

Country regulation for youth In Germany, children under the age of seven are considered to be incapable (§ 104 BGB financial access = Bürgerliches Gesetzbuch23/ German Civil Code); that is, that their legal representative (usually the parents) act on their behalf. Children between the age of 7 and 17 possess limited legal capacity (§ 106 BGB); that is, they need the consent of their legal representatives for effective conclusion of transactions. An exception to this is if the individual provides their services from funds that have been given to them for this purpose or for free disposal (pocket money, § 110 BGB). Adolescents from 18 years and above have full legal capacity.

Financial education /inclusion strategy24 and national coordination

In Germany, there is no national strategy for financial education or any coordinated approach to increasing financial education and/or inclusion for the overall population nor the youth specifically. The provision of financial and monetary knowledge is, however, integrated into the curricula of the various subjects of general education.

Moreover, the public mandate for financial institutions to promote savings and economic education is embedded into the savings bank law.

Project approach / strategy

The Sparkassen-SchulService is focused on schoolchildren and teachers from all schools that provide general education from primary schools to Gymnasium grammar schools, as well as vocational schools. The service supports the schools with multi-media, teaching lessons and events concerning financial and money matters.

Project activities

 Individual savings banks create long-term partnerships with schools. For example, there are school councils that advise financial institutions on the needs and demands of the schools. The councils also organize special information days for schools where they present their actions.  Some savings banks visit the schools several times a year and children have the opportunity to deposit their savings into a savings account provided free of charge by the savings bank. Small rewards such as books, pens or other gifts make the trip to the savings bank an enjoyable and engaging experience.  Some savings banks visit schools to offer training courses such as "How does a current account work?", "What is a credit?" and "How do payment services work?"

23

German Civil Code (2015): https://www.gesetze-im-internet.de/englisch_bgb/englisch_bgb.html#p0307 A national strategy for financial education, as defined by the OECD, refers to a nationally co-ordinated approach to financial education that consists of an adapted framework or programme,” OECD (2013) OECD/INFE HIGH-LEVEL PRINCIPLES ON NATIONAL STRATEGIES FOR FINANCIAL EDUCATION: http://www.oecd.org/finance/financial-education/OECD_INFE_High_Level_Principles_National_Strategies_Financial_Education_APEC.pdf 24

11

 Savings Banks provide free learning material to schools such as brochures, worksheets, videos, online material, games and role-playing materials that are geared towards the school curriculum.  The materials focus on finance, economics and career choices, and is impartial and free of advertising. They have been examined by consumer organizations and rated as “good ”and “very good”. Teachers can access a public database where they can read the detailed results.  The material is developed by the German Savings Bank Publisher (Deutscher Sparkassenverlag), which sells it to the savings banks. The publisher has its own editorial team for educational media. The team is supported by the German Savings Bank Association (Deutscher Sparkassen- und Giroverband) and the regional savings bank associations, in order to ensure that the school services meet the needs of the savings banks and complies with the guiding principles of the German Savings Banks Finance Group (Sparkassen-Finanzgruppe).

More information

12

The German Savings Bank Publisher maintains a website at www.sparkassenschulservice.de, where teachers can see detailed information about the savings banks ’ commitment to education via the Sparkassen-SchulService.

4.2 Government Savings Bank Thailand Country

Thailand

Organization

Government Savings Bank

Program Name

GSB School Bank and Virtual School Bank

Age groups

7-21 years old

Overview

The GSB School Bank is a simulation of the Bank branch in schools and educational institutions providing deposit and withdrawal services to students.

Partners involved

Government Savings Bank, Ministry of Education & Office of the Basic Education Commission, and Schools

Project objective

    

Instill disciplined savings habits in young people; Educate students on the principles of customer management and service, how to work with other people and to develop a sense of responsibility; Encourage students to spend their time wisely on activities beneficial to society as a whole; Support educational institutions in running activities beneficial to students; Develop good relationships amongst young people, the school and the Bank.

Country regulation for youth financial access

Thailand does not have a specific regulation for youth financial services.

Financial education/ inclusion Strategy and national coordination

As of 2016, a national strategy for financial education is being designed by the Government with the aim to financially educate Thai people. The GSB School Bank project thus contributes to promoting savings and instilling savings discipline to youth and children under this framework.

Project approach / strategy

The project has traditionally instilled savings habits in Thai youth and children by providing a mobile service to their school. At present, GSB School Bank is providing deposit and withdrawal services to students to facilitate savings and access to finance for the students and to eliminate the need to go to the official Bank branch as deposit and withdrawal services are provided before the morning class or during the lunch hour. GSB School Bank also provides an opportunity for students to work in the bank.

Project activities

GSB School Bank:  providing physical deposit and withdrawal services to students in schools.

Virtual School Bank:  School Bank Building: schools and educational institutions where students can make deposits and withdrawal by using virtual value of money (Money Value G) that GSB sets up. Students can join various activities by doing good deeds to receive Money Value G for expenses.  Training Centre: training students to work in School Bank as the Bank officers.  Online Learning Promotion Building: students can access to gain knowledge such as ONET Tuition.  Virtual GSB Bank Branch: students can learn about GSB transaction and financial products.  Other important places including Tourist attractions in Thailand

Further information

http://schoolbank.gsb.or.th/ https://www.gsbschoolbank.com/ http://www.gsbgen.com/

13

4.3 Bank Simpanan Nasional (BSN), Malaysia Country

Malaysia

Organization

Bank Simpanan Nasional

Program Name

Schoolchildren Savings Scheme (SGSP) & BSN Smart Junior (BSJ)

Age groups

7-17 years old - SGSP 7-20 years old - BSJ

Overview

Schoolchildren Savings Scheme (SGSP) is a savings scheme for which BSN organizes an annual competition. This competition is open to students studying in Malaysian government / national schools. Under this scheme, the student or school which has the highest average savings balance and savings growth will be declared as the winner. For schools, additional criteria would be the enrolment of students into this savings program.

BSJ is a club that welcomes young savers to enroll as members. Young people can also join an educational program, BSN Educate, which teaches students about the importance of developing a savings habit. This is done via talks given by the Bank’s student deposit team during school assemblies, or embedded within the school’s curriculum.

Additionally, several activities are conducted during the school’s co-curriculum day, namely coloring contests, games and quizzes. The Bank also has a counter opened to receive deposits from the students (via their teachers) to go towards the opening of a savings/ GIRO account.

Partners involved

Ministry of Education’s School Management Division & Ministry of Education’s Curriculum and Arts Division

Project objective

Instill a savings habit from a young age.

Country regulation for youth financial access

Any individual, Malaysian or permanent resident, aged 18 years and above may open a savings account in a bank in Malaysia with valid a Malaysian-issued IC, passport and other supporting document (for non-Malaysians). For individuals below the age of 18 years old, signed consent must be obtained from parents / guardians.

Financial education/inclusion Strategy and national coordination

BSN was incorporated in 1974 through an act of Parliament, the Bank Simpanan Nasional (BSN) Act, with specific mandates; one of which is to inculcate the savings habit amongst Malaysians and young savers. The two programs run by the Bank are a result of the given mandate. Implementation of the programs is done by the Bank itself (with approval from the Ministry of Education) and by the Bank’s student deposits team at branches nationwide.

Project approach / strategy

The SGSP, launched by BSN in 1982, is a savings scheme that organizes an annual competition and is run nationwide.

BSN Smart Junior (BSJ) is a club that welcomes young savers to enroll as members to enjoy different financial benefits as: higher interest, insurance, discounts and participation in other programs.

14

Project activities

   

More information

Information on SGSP: http://www.mybsn.com.my/content.xhtml?contentId=315 Information on BSJ: http://www.mybsn.com.my/content.xhtml?contentId=316

Annual competitions Games, coloring contests, quizzes Financial literacy programs included in curricula BSN School Carnival: Kids Talent Contest and Coloring Contest to raise funds for the schools as well as to encourage student savers to join SGSP scheme and KPM, BSN’s Young Savers Club

4.4 Kenya Post Office Savings Bank Country

Kenya

Organization

Kenya Post Office Saving Bank (KPOSB)

Program Name

SMATA (“Smarter” in local language)

Age groups

12-18 years old

Overview

Each Postbank branch was asked to select a school in its vicinity to mentor. The branch was required to build a strong relationship with the school, provide Postbank Savings Education, open accounts and follow-up regularly.

Partners involved

MasterCard Foundation, Save the Children in Kenya, Center for Social Development (CSD) at Washington University in St. Louis, New America Foundation (NAF), CGAP (the Consultative Group to Assist the Poor) & Save the Children Federation, Inc (SC US)

Project objective

Develop and implement a small balance savings product appropriate for local low income youth.

Country regulation for youth financial access

Youth can open their own account if they have their parent or legal guardian There is no specific regulation that covers youth but these are generally covered under the Anti Money Laundering ACT and the Central Bank Prudential guidelines.

Financial education / inclusion Strategy and national coordination

Combined strategies and initiatives are in place to develop financial education, consumer protection and financial inclusion. The Kenyan Financial Education Partnership Taskforce meets monthly to monitor project progress and to develop strategies to take projects forward. The Taskforce is comprised of senior representatives from the Government, the financial services sector (including informal financial services), educationalists and the media.

Project approach / strategy

A specific account for the youth was created and added to the bank’s youth portfolio, SMATA (“smarter” in local language), in response to Kenya’s youth population growth as an approach to renew its aging customer base and to advance its broader strategic objectives to expanding finance access in general and to mobilize savings. This was done after country–wide market research with over 640 youth & 270 community leaders was conducted to determine demand for a savings product for youth.

Project activities

   

More information

Branch competitions: branches compete for the number of new accounts opened and the winners receive cash awards.

SMATA fun days: fun days are organized in regions whereby the youth savers engage in interactive activities.

Global Money Week activities: school children compete in activities like essay writing, drama, drawings, etc. and the winners receive gifts such as t-shirts, note books and cash.

Radio advertisements.

http://www.newamerica.org/asset-building/youthsave/

15

4.5 Banco Estado, Chile Country

Chile

Organization

Banco Estado

Program Name

“Ahorro en Colegios” (2012 – 2014) (Saving at Schools), “Ahorra tu Sueño” (Save for your Dream), “Usa bien tu Plata” (since 2015) (Use your Money wisely)

Age groups

8-10 years old & 16-17 years old

Overview

“Ahora tu Sueño” was created with the objective of recreating banks in schools and developing the savings habit in the schools in which the project would be implemented.

Moreover, since 2015, “Usa bien tu Plata” is fully operational through an integrated financial education platform which includes workshops in public and private schools in two of the metropolitan regions of the capital, Santiago.

Partners involved

Banco Estado, Puntaje Nacional & 50 public and private schools

Project objective

To boost and strengthen the concepts of responsibility, confidence, planning and perseverance in children as well as a positive attitude about the future.

Country regulation for youth An account must be opened by a person 18 years of age or older, and otherwise an financial access account may only be opened by a legal representative of a person under 18 years of age.

Transfers from this account are not accepted so long as the holder is in pre-pubescent stage (female under 12 years and male under 14 years old). The legal representative of the account holder will never be allowed to make transfers.

There is a differentiation in treatment between men and women for the purposes of managing savings accounts according to Chilean law, Article 2625 of the Civil Code.

Article 26 states that “Every child who has not turned seven is referred to as an infant or child; Adolescent, the male who has not turned fourteen years and the female who has not turned twelve; Adult, who is no longer of adolescent age; Of age, or simply elder, who has reached the age of eighteen; And not of age, or simply minor, who has not yet reached eighteen year of age.”

Financial education/inclusion There is no integrated strategy at national level; the design of a strategy remains a Strategy and national challenge. However, there are a number of initiatives that strongly contribute to coordination financial inclusion in the country such as CuentaRUT and CajaVecina, which have been nationally and internationally recognized for their contribution in this area.

Project approach / strategy

The projects are present mostly in schools from vulnerable municipalities and consist of workshops and financial education courses for students. The projects also developed a financial education platform for youth.

Project activities

   

More information

www.usabientuplata.cl https://www.facebook.com/usabientuplata;

25

On-site workshops in schools; Role-play and teaching oriented leisure activities in each workshop; Website with audiovisual content, a blog, on-line workshops; Video summarizing the programme.

Biblioteca del Congreso Nacional de Chile/BCN (2013) PERMITE AL PADRE Y A LA MADRE, INDISTINTAMENTE, ABRIR CUENTAS DE AHORRO A FAVOR DE SUS HIJOS: https://www.leychile.cl/Navegar?idNorma=1052273 16

4.6 Impact assessments While the contributing banks in this paper have not reported results of studies aimed at evaluating the impact of the SchoolBank savings programs on the behaviour of the children and youth which took part in the highlighted programs, general surveys on the level of satisfaction of the young customers resulted in quite positive outcomes: 

GSB of Thailand reported that, based on survey which was distributed to 20026 young people involved in the school banking program, 97.1% of the interviewed students reported that they agreed or strongly agreed with the statement that ‘Schoolbank project helped them to save money’. In fact, 16.6% of the students reported to be saving daily (frequency of deposit) while 69.7% reported to save weekly27.



The German savings banks commissioned a learning study28 which aimed at determining the effectiveness of the financial education lessons delivered by the savings banks. The study showed that even a few hours of targeted financial lessons led to a significant increase (43%) in the level of basic economic learning, with no difference between boys and girls. It also produced a considerable rise in competence (27%) in terms of the ability to apply transferable skills and solve problems in connection with financial matters. Moreover, around 80% of the schoolchildren that took part in the study indicated that they had learned a lot during the lessons and that what they had learned was important.

Such positive results across regions further demonstrates the ability of SchoolBank models to be catered to local contexts in order to instill, develop and strengthen healthy financial habits amongst children and youth worldwide.

4.7 Critical success factors The factors critical to the success of SchoolBank projects vary according to different national circumstances and culture.

Notable common denominators, however, are: 

Government support in the form of an enabling environment for financial inclusion and support for the promotion of financial education, savings and money management to begin at a young age in schools.

The vision and mission of the involved bank to promote savings and social responsibility as well as allocating the necessary resources and budget over time to do so.

The full support of the school principal / director to the SchoolBank project so as to create an enabling environment.

Both teachers and students realize the importance of the School Bank Project for the promotion of savings and join in the activities of the School Bank Project on a continuous basis (this is particularly important for the model where the branch is established in the school).

  

Specific examples of critical success factors perceived by WSBI member banks are outlined below: Thailand 

The Government Savings Bank (GSB) has a vision and mission to promote savings and social responsibility amongst the Thai population including children and youth. As a result, GSB has supported the School Bank Project and has allocated the budget necessary for continuing the project consecutively since its first year of operation in 1998. School Bank activities reach more than 1,000 school participants across the country. In addition, GSB organizes a ‘Children's Day’ every year during which savings boxes are distributed to children who deposit money at the Bank. This promotes the image of GSB as the ‘beloved bank of children’.

The cooperation and support from partner agencies, such as the Ministry of Education and Office of the Basic Education Commission, is one of critical success factors of the Project.

The full support of the School Principal to the SchoolBank project is considered to be another critical success factor. In Thailand one of the main eligibility criteria retained by GSB for the opening of a School Bank is that the school Principal must be convinced and demonstrate awareness of the importance of the School Bank Project and of students’ learning through actual experience.

It is also essential that the educational institution can manage the school bank operations to its full use and potential.

The prerequisite for this is that both teachers and students realize the importance of the School Bank Project for the promotion of savings and join in the activities of the School Bank Project on a continuous basis. This also means that

 



26

200 students are randomly selected from students who work in GSB schools banks

27

GSB sends the questionnaire to schools and GSB branches that supervise School Bank via e-mail and processes data upon receipt of filled

questionnaires.

28 “Basic economic education: practical tests” - Ökonomische Grundbildung im Praxistest, March 2015 Centre for Economic Education in Siegen – Zentrum für Ökonomische Bildung Siegen 17

the experience of working continuously in School Bank can be included as an internship or job training before graduation in the student’s curriculum vitae. School Bank thus has the dual advantage that students can claim work experience when applying for jobs after their formal education and also accumulate savings while studying that can be used for investment or further education in the future.

Malaysia 

One of the key success factors of the School Children Savings Scheme (SGSP) offered by Bank Simpanan Nasional (BSN) is largely attributed to BSN’s collaboration with the Ministry of Education (MOE). With this collaboration, the Bank has been given approval to run BSN School Carnival at selected primary schools nationwide since 2014.

Consequently, BSN is able to establish close ties with each of the schools’ Parents Teachers Association.



Germany 

The success of the Saving Banks SchoolService and School Banking can be attributed to the banks’ public mandate to support financial education in school (anchored in the savings banks act of Germany’s federal states and in the charters of the savings banks) and to its continued commitment to quality, excellence and sustainability.

A whole series of school bank material focusing on finance, economics and career choices has been developed by the German Savings Bank organization at national level. The material has been examined by consumer organisations and rated as “good ”and “very good”. Teachers can access a public database where they can read the detailed results.

The school service material has also been approved by the education ministries (Germany has 16 federal states, each with its own education ministry), which have integrated the material into their consumer education activities (for example, Baden-Württemberg and North Rhine-Westphalia).

The Saving Banks SchoolService supports sustainability. The produced materials have been certified by UNESCO as an official toolkit for the UN Decade "Education for Sustainable Development".

For individual German savings banks, the critical success factors can be described as follows: Close contact with teaching staff and the education authority Staff continuity among school savings officers Financial support via donations to projects and activities in schools Teaching material provided free of charge Numerous additional school events, e.g. school sports events, presentations, visits to branches etc.

Involvement in “Schule-Wirtschaft” (economics for schools) and other school related working groups Numerous events outside school Concept constantly evolving





         

5 Barriers to youth financial inclusion Financial inclusion is a key enabler to create economic independence, fight crippling debt and break the cycle of poverty29. Just as adults do, youth should have financial knowledge and skills as well as access to appropriate financial services to enhance their social and economic well-being30 but the reality is that several barriers stand in the way of youth financial inclusion and access. Studies which try to determine the most common barriers to access, identify causes both on the demand as well as on the supply side. Concerning the demand side, barriers such as cost, travel distance, and amount of paperwork and formal identification requirements play an important role. Concerning the supply side, limitations linked to legal and regulatory environments are the most common identified by financial service providers, as well as the lack of financial return in the short run for the financial institutions investing in children and youth products. Other barriers which seem to be the most important ones are linked to the supply side; namely the restrictions in the legal and regulatory environment and the inappropriateness of financial products.

29

MasterCard Foundation (2015) Financial Services for Young People: Prospects and Challenges http://www.mastercardfdn.org/wpcontent/uploads/2015/08/Youth-Financial-Services.pdf 30 Sherraden, M. S., & Ansong, D. (2013). Research Evidence on the CYFI Model of Children and Youth as Economic Citizens (CSD Research Report 1304). St. Louis, MO: Washington University, Center for Social Development, p. 4, http://www.childfinanceinternational.org/index.php?option=com_mtree&task=att_download&link_id=1522&cf_id=200 18

An overview barriers and solutions identified through different practices and studies are summarized below (see Figure 4): Figure 4 - Barriers for banks to serve youth Barriers for youth31

Solutions

Restrictions in the legal and regulatory environment (e.g., minimum age and identification requirements)

Create a youth-friendly regulatory environment that recognizes the needs of youth, and is both inclusive and protective of youth.

Inappropriate and inaccessible financial products offered by financial service providers

Stimulate and support the financial sector to design appropriate financial products that are consistent with the Child Friendly Banking principles (CYFI) Develop policies that offer incentives or subsidies to open and use a savings account.

Lack of disposable income

In many countries youth struggles with a lack of disposable income, which makes them less likely to save and open a bank account. However, different studies show that children and youth do have disposable income: either from little tasks they do for pocket money or, sometimes in vulnerable situations, young people are responsible for managing their householdsâ&#x20AC;&#x2122; finances.

Low interest of youth for the financial system

Young peopleâ&#x20AC;&#x2122;s lack of interest in the financial system is often due to the fact that youth are not aware of the usefulness of financial products. Financial education can overcome this barrier as well as involving children and youth in engaging and interactive ways to learn about financial system and key players within the financial system.

Poor financial capabilities of youth

Inform and expose youth to the opportunities and possibilities of financial services so that young people can put into practice their knowledge.

The existence of these barriers gives insight to explain the large difference that exists between the financial inclusion level of adults and compared to that of children and youth as a consistent trend across all regions of the world is the overall higher level of financial exclusion of youth from the formal financial system. While much literature has focused on depicting the benefits of financial inclusion in general, less so has taken into consideration its benefits for the youth particularly or on the dangers of financial exclusion and its costs for the societies and the economies. According to the Global Findex 2015, of the approximately 1.2 billion youth aged 15-24 in the world, 54% of youngsters do not have accounts at a formal financial institution (see Figure 5 below).

31

http://www.uncdf.org/sites/default/files/download/accesstoyfs_05_for_printing.pdf 19

Figure 5: % of youth aged 15-24 without an account at a financial institution

100%

93%

90%

80%

83%

80% 70%

64%

63%

67%

65%

60%

54%

51%

50%

44%

45%

40%

40%

39%

30%

30% 16%

20% 10%

4%

0% OECD

Latin America Europe & Sub-Saharan Middle East & Carribean Central Asia Africa

Adults

East Asia & Pacific

South Asia

World

Youth

Source: World Bank, Global Findex 2015

While challenging, these barriers can and have been overcome, however, as illustrated in case studies highlighted in this paper. In fact, when looking collectively at the five examples provided in this paper, the amount of cumulative savings that the children and youth involved in the SchoolBank projects have managed to save is impressive (â&#x201A;Ź2,937,650,000)32 contradicting the perception that children and youth do not want to save, nor do they have money or disposable income to save. The perception that youth are not interested in the financial system proves to be untrue simply by looking at the number of savings accounts which were opened by and still actively used by the children. The interest and ability to save is clear, especially when the access is combined with financial education and it is delivered by trained staff which has a childfriendly approach. Furthermore, the case studies exemplified in this paper show how regulatory barriers can be overcome provided there is a long term commitment to financial education and poverty reduction from the banks perspective as well as willingness to closely collaborate with other public institutions.

Different organizations at international level have tried to address these issues, both by providing examples and case studies of specific success stories, or by contributing to, for example, the development of a business case for youth financial services.33 Despite progress made in within the realm of financial inclusion for youth, the highest barrier to youth financial inclusion remains to be the inability of financial institutions to recognize business opportunities in serving children and youth. Therefore, the youth financial services market still remains under-explored and underserved.

32

Self-reported number by the banks involved in the study CGAP business case: http://www.cgap.org/sites/default/files/Focus-Note-Business-Case-for-Youth-Savings-A-Framework-Jul-2014.pdf, CYFI business case and product development workshop, CYFI business case for governmental institutions 33

20

6. Conclusions Financial education works, but more evidence is needed The case studies examined in this paper give striking examples of how SchoolBank functions; however, more data is needed to understand the long-term benefit for citizens. If investments spent on financial education programs continue to follow an upward trend, then the need for evidence will become even more demanded by program partners. Measuring impact, which starts with tracking knowledge level, is essential when governments vet programs for accountability. The cases in this paper provide valuable snapshots, portraying the diverse ways in which SchoolBank can be developed and implemented, and how challenges to do so have been addressed. From a short-term, anecdotal perspective, the programs have established a strong track record amongst schools, children and their families, and government agencies and other stakeholders continue to pour support into SchoolBank efforts across the globe. Tracking the impact of long-term behavior of children and youth involved in these projects, however, has proven elusive and should be addressed.

Positive link between age, financial education and savings The case studies and background information contained in this paper pinpoint the need to bring financial education to children as early as possible and throughout their educational lives, in order to form a mindset that carries with students well beyond their youth. The focus of SchoolBankâ&#x20AC;&#x2122;s on enabling children and youth to save, receive and spend money wisely is vital to this long-term approach. Having children open a bank account at school, via proxy-banks or direct banking, is particularly powerful as this real-world, hands-on approach complements well with Economic Citizenship Education and financial awareness efforts.

Proven business case is elusive More can be done to understand SchoolBank programmes in play and to extract needed data on a short and long-term basis. However, the examined cases prove that banks around the world which have committed to improving financial education and inclusion of children and youth, can have an active role in their communities. Although young people are not as profitable as clients as are adults, young people can save and, if given the possibility, will do so systematically. However, the banks should not only look at the short-term profitability, but should view SchoolBank projects as investments in the future.

Comprehensive SchoolBank model proves effective A clear pattern emerging from the comparison of case studies is that SchoolBank works best to boost responsible savings behavior amongst young people by combining financial education efforts packaged within access to appropriate consumer protection frameworks including childfriendly banking products adapted specifically to the needs of the youth. Furthermore, time is key: financial education should begin as early as possible, preferably by the age of seven, and continue throughout a childâ&#x20AC;&#x2122;s educational period. The classroom remains the preferred setting to teach financial education concepts as it can lessen or eliminate social-economic barriers.

Partnerships essential No one model applies to each setting. The case studies clearly demonstrate the way in which SchoolBank takes on different forms from country to country. Government support can vary depending on jurisdiction as can support from other organizations, noting that the government was the primary source of support in the examples studied. Non-governmental organizations also can play an important role in terms of funding, implementation expertise and on-site instruction.

21

7. Bibliography Alliance for Financial Inclusion. http://www.afi-global.org/ Bank Simpanan Nasional. Schoolchildren Savings Scheme (SGSP). http://www.mybsn.com.my/content.xhtml?contentId=315 Bank Simpanan Nasional. BSN Smart Junior (BSJ). http://www.mybsn.com.my/content.xhtml?contentId=316 Banco Estado. “Usa bien tu Plata”. http://www.usabientuplata.cl/. https://www.facebook.com/usabientuplata Biblioteca del Congreso Nacional de Chile/BCN. PERMITE AL PADRE Y A LA MADRE, INDISTINTAMENTE, ABRIR CUENTAS DE AHORRO A FAVOR DE SUS HIJOS. 2013. https://www.leychile.cl/Navegar?idNorma=1052273 Centre for Economic Education in Siegen – Zentrum für Ökonomische Bildung Siegen. Ökonomische Grundbildung im Praxistest. 2015 Child and Youth Finance International. A Guide to Economic Citizenship Education. 2012. https://issuu.com/childfinanceinternational/docs/a-guide-to-economic-citizenship-education-cyfi/1?e=7128000/2519036 Child and Youth Finance International. Landscape Series: Economic Citizenship Education for Children and Youth. 2016. https://issuu.com/childfinanceinternational/docs/cyfi-ece-landscape Child and Youth Finance International. Financial Inclusion for Children and Youth. 2016. https://issuu.com/childfinanceinternational/docs/cyfi-financial-inclusion-landscape/1?e=7128000/37817487 CGAP. The Business Case for Youth Savings: A Framework. 2014. http://www.cgap.org/sites/default/files/Focus-NoteBusiness-Case-for-Youth-Savings-A-Framework-Jul-2014.pdf Corporation for Enterprise Development (CFED). Financial Education and Account Access Among Elementary Students.

2014. https://www.treasury.gov/resource- center/financial-education/Documents/AFCO Youth Research Brief.pdf Deutsche Bundesbank. Private Haushalte und ihre Finanzen. 2013.

Whitebread David, and Dr. Sue Bingham. Habit Formation and Learning in Young Children. Money Advice Service. 2013 Egmont Ehapa Media. KidsVerbraucherAnalyse 2015. https://www.ehapa.de/pressemitteilungen/kidsverbraucheranalyse2015/ German Civil Code. Section 104. 2015. https://www.gesetze-im-internet.de/englisch_bgb/englisch_bgb.html#p0307 Glassman, M. Dewey and Vygotsky. “Society, experience and inquiry in educational practice”, Educational Researcher, Volume 30, No.4, pp. 3-14. 2001.

Global Partnership for Financial Inclusion. http://www.gpfi.org/ GSB School Bank. http://schoolbank.gsb.or.th/. https://www.gsbschoolbank.com/. http://www.gsbgen.com/.

Kenya Post Office Saving Bank (KPOSB). YouthSave. http://www.newamerica.org/asset-building/youthsave/ Making Cents International. State of the Field in Youth Enterprise, Employment and Livelihoods Development: Programming and Policymaking in Youth Enterprise, Employment & Livelihoods Development. Lessons from Making Cents International’s 2009 Global Youth Enterprise Conference. Washington, DC: Making Cents International. 2010. http://www.youthenterpriseconference.org/SiteManager/CuteEditor_Files/uploads/MakingCentsInternationalStateoftheF ieldPublication2009Bookmarked.pdf MasterCard Foundation. Financial Services for Young People: Prospects and Challenges. 2015. http://www.mastercardfdn.org/wp-content/uploads/2015/08/Youth-Financial-Services.pdf 22

Miller, M., Reichelstein, J., Salas, C., and Zia, B. “Can You Help Someone Become Financially Capable?”. A meta-analysis of the literature. World Bank, Policy Research Working Paper 6745. Washington DC. 2014. https://openknowledge.worldbank.org/bitstream/handle/10986/16833/WPS6745.pdf?sequence=1&isAllowed=y OECD. Improving Financial Literacy. 2005. http://www.oecd.org/finance/financialeducation/improvingfinancialliteracyanalysisofissuesandpolicies.htm OECD. International Network on Financial Education. http://www.financial-education.org/join_INFE.html OECD. International Student Assessment. http://www.oecd.org/pisa/ OECD. PISA 2012. Financial Literacy Framework. 2013. http://www.oecd.org/finance/financialeducation/PISA2012FrameworkLiteracy.pdf OECD. The Importance of Financial Education. 2006.

http://www.oecd.org/finance/financial-education/37087833.pdf

OECD. Financial Education in Schools. 2012. http://www.oecd.org/daf/fin/financial-education/FinEdSchool_web.pdf OECD. Financial education at School. International OECD/INFE Guidelines. FCAC-OECD Conference on Financial Literacy.

Toronto. 2011. http://www.oecd.org/finance/financial-education/48211770.pdf OECD/INFE. High-level Principles on National Strategies for Financial Education. 2013. http://www.oecd.org/finance/financialeducation/OECD_INFE_High_Level_Principles_National_Strategies_Financial_Education_APEC.pdf Sherraden, M. S., & Ansong, D. Research Evidence on the CYFI Model of Children and Youth as Economic Citizens (CSD Research Report 13- 04). St. Louis, MO: Washington University, Center for Social Development, p. 4. 2013. http://www.childfinanceinternational.org/index.php?option=com_mtree&task=att_download&link_id=1522&cf_id=200 UNCDF. Policy Opportunities and Constraints to Access Youth Financial Services. 2012. http://www.uncdf.org/sites/default/files/download/accesstoyfs_05_for_printing.pdf World Bank. Financial Capability Surveys Around the World. 2013. http://responsiblefinance.worldbank.org/~/media/GIAWB/FL/Documents/Publications/Why-financial-capability-isimportant.pdf WSBI. The World Savings and Retail Banking Institute. Roots of Savings and Retail Banks. http://www.savingsbanks.com/About-us/History/Pages/portal.aspx

23

24