2015 ─ Children, Youth & Finance 2015

Children, Youth & Finance 2015

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© Child and Youth Finance International (CYFI) December 2015 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 16524 │ 1001 RA Amsterdam │The Netherlands T +31 (0)20 520 3900 │ E: 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

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Acknowledgements First and foremost, we would like to thank the partners and collaborators in the CYFI Network. It is through their tireless work that the Child and Youth Finance Movement will be able to generate the global shift in greater financial inclusion and Economic Citizenship Education (ECE) for children and youth throughout the world. We would also like to take this opportunity to thank all the people who made this publication possible by providing information on outreach figures, programming details or policy insights. Their commitment, knowledge and expertise have been invaluable in helping shape this year’s edition of Children, Youth and Finance.

In particular, we would also like to thank the CYFI Working Groups and National Platforms who assisted in the creation and compilation of this document: 

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The Research Working Group members who have created the CYFI Theory of Change, contributed to the CYFI National Authority Surveys and who have been leaders in pioneering research in the field of financial capability for children and youth.

The Education Working Group members who collaborated on the establishment of the Learning Framework for Economic Citizenship Education and who have contributed to the ECE Survey.

The National Authorities who have collaborated with the CYFI Secretariat and have shown interest and passion for advancing national strategies on economic citizenship for children and youth.

Authorship This publication was written by the CYFI Secretariat under the guidance of Mrs. Jeroo Billimoria, with the exception of chapter 4. All opinions expressed in this publication are based within the framework of the CYFI Strategy and Mission Statement, created by Mrs. Jeroo Billimoria, Founder and Executive Director of CYFI. Chapter 4 was written by Floor Knoote with the valuable input of Professor Lewis Mandell, Professor Margaret Sherraden, Professor Michael Sherraden and Dr. Terri Friedline, who have each contributed considerably to the overall field of research on inclusive finance of young people. A thank you goes out to them for their input over the last few years. A special thank you also goes out to Michael Wineck, CYFI Research Intern, who conducted extensive research and cowrote chapters 4 and 5 of this publication.

We would lastly 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. We thank them for dedicating their time, energies and passions to this initiative and for sharing our vision.

The Child and Youth Finance Team

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Contents Acknowledgements………………………………………………………………………………….……………………………..………………..……6 Executive Summary………………………………………..……….………………………………………………………………………………..……8 Chapter 1 Introduction…………………………………………………………………………………………………………………….…………10 The Challenge………………………………………………………………………………….………………………………………………………...………………10 Child & Youth Finance International (CYFI) ………………………………………………………………………………….……………………….……10 Approach to Collaborative Systems Change ………………………………………………………….……………………….…………….…………….10

Chapter 2 Terms and Definitions……………………………………………………….…….………………………….………………14 Chapter 3 Compiling Children, Youth & Finance………………...........................................................16 3.1 Introduction………………………………………………………………………………….…………………………………………………………..…….……16 3.2 Compilation………………………………………………………………………………….………………………………………………………………….……16 3.3 Limitations………………………………………………………………………………….………………………………………………………..……………….16

Chapter 4 Building the Case for Economic Citizenship……….…………………….………….………………….18 4.1 The Macro-Economic Picture of Inclusive Finance and the Informed Consumer……….………………………………..…………18 4.2. Evidence on the Impact of Financial Inclusion and Financial Education of Children and Youth……….….……………..…18 4.3 Conclusion……….………………………………….…………….……….….……………………………………………………………….…………………….22

Chapter 5 Advancing Economic Citizenship through the CYFI Network…………………………..24 5.1 Economic Citizenship Education Programs……….………………………………………………….…………….……….…………………………24 5.2. Financial Institutions ……….….……………………………….………………………………………………..…………………………….………………30 5.3 National Authorities in the CYFI Network ………………………………………………………………..……………………………………………32

Chapter 6 Policy and Program Recommendations………………………………………………..……………………36 Bibliography……………………………………………………………………………………………………….………………………..……………………38

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Executive Summary Millions of children around the world are dealing with adversity, facing extreme deprivation, have no prospect of finding employment and have no access to finance to build a livelihood and break their cycle of poverty. Many young people are heading households, providing the main income for their families or working their way through school. The provision of more or complete autonomy for children and youth within the financial system (being able to control one’s own finances within certain conditions), and having the skills needed to thrive within the financial and the labour markets, could provide a significant benefit and additional means of survival for a great number of young people. Financial capability and the creation of sustainable livelihoods of children and youth is unquestionably a key focus point on the agenda of national and regional authorities, civil society organizations and financial institutions.

This is in line with the current global focus on creating a savings culture, improving saving habits and creating employment opportunities for young people. This report identifies the features that the CYFI partners and collaborators are building on.

Building the Case for Economic Citizenship The evidence base for the financial capabilities of youth has grown exponentially in the last few years. Gradually, the body of evidence for family assets and savings and individual accounts is growing extensively. All in all, the results of these studies are positive, indicating improved savings behaviour and educational outcomes as key outcomes for young people. It remains to be seen whether financial inclusion, in its many forms, may also be linked to increased confidence, outlook on the future, and employment for youth. The results of most recent research, building on previous research conclusions summarized in Chapter 4 of this document, demonstrate positive impact of early financial inclusion and education for account opening, depositing, and savings, as well as having control of one's financial situation; However, it does not show effects for owning a retirement account. Financial education shows impact for financial literacy, financial attitudes and behavior as well as inter-temporal decision making. Combined approaches suggest a positive impact on savings outcomes and financial well-being, leading to greater financial empowerment and more informed choices.

Advancing Economic Citizenship through the CYFI Network  Comparing the CYFI partner data across the last 4 years, shows that national authorities have become more responsive to questions on youth finance and economic citizenship. This is due to the growth of the CYFI network itself and may indicate greater interest in the topic of increasing access to financial services, also for those under the age of 18.  Moreover, the diversity of respondents has increased over the years throughout all sectors. Responses received are more equally divided over regions, from civil society, financial institutions and government, indicating that the topic is picking up across the world.  Data additionally shows that more partners are integrating inclusive finance strategies and combing access to finance with financial education. As the focus on under 18s has increased, this may indicate that more children are receiving integrated services today. More data is necessary, however, to confirm the depth of this outreach, along with the impact of this programming on financial behaviours as well as social and economic empowerment. Youth financial inclusion and economic empowerment data is still limited, partially due to the general lack of national evaluations on financial education and inclusion strategies.  The data also shows that many programs in the CYFI network do not yet have a significant focus on services for those in the bottom age segment (under the age of 10.) Given the fact that research is increasingly showing the benefits of building financial capability of young people at an early age, organizations should be further encouraged to develop materials specifically aimed at this younger age demographic.  Since 2012, there has been an increase in civil society respondents indicating that they are offering all 3 components of the ECE learning framework, along with an increase in respondents indicating that their programs are incorporating a savings component. This is encouraging as it shows that the push for financial inclusion and educational programming for children and youth also includes social and livelihoods elements to complement core financial literacy competencies. This also shows an encouraging trend with the link between savings, ECE and enterprise participation; when a savings component is added to an education program, there is an increase in youth participation in enterprise. This increase is even more pronounced when there is a deliberate inclusion of livelihoods education. Finally, a greater number of ECE survey respondents than national authorities indicated that they include a

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specific gender component to their educational programming. Further encouraging results show that these adolescent girls are in fact receiving integrated programming and are gaining enterprise experience through these projects.

Recommendations    

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To provide children and youth with a significant position in national financial inclusion strategies, financial

regulations and consumer protection policies. To continue to focus on linking ECE and financial inclusion initiatives across the world through a combination of formal and non-formal channels. To ensure productive coordination and collaboration among diverse stakeholders on Economic Citizenship and inclusive finance at the national, regional and global level.

To involve youth more systematically in discussions on their own current and future economic opportunities. This requires an effort to intensify youth participation and incorporate youth input during the drafting and consultation phases of national initiatives on financial inclusion and education for young people.

To encourage focus from all stakeholders to increase the availability of youth data for further research and explore innovative ways to do so.

Children, Youth & Finance: Content As a key step towards creating a change in opportunity for young people, 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; and describe the state of these efforts within the CYFI network of partners.

This publication is the fourth in an annual series of publications documenting the state of field in economic citizenship and the state of the work of partners in the CYFI network and provides an analysis of current trends and gaps which need be addressed. ❶ 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. ❷ CHAPTER 2 lays out CYFI’s Theory of Change and outlines the key terms and definitions used throughout the document. The Theory of Change stresses the importance of creating the necessary systems to support the building of financial capabilities among children and youth and proposes that financial inclusion, along with financial, social and livelihoods education are the building blocks of empowerment and financial capability that underpin economic citizenship for children and youth

❺ CHAPTER 5 describes the findings of CYFI’s assessment of financial institutions, education providers and national authorities in the CYFI network. It shows the connection between education on finance and experience in finance; the extent to which programs incorporate all three components of Economic Citizenship and the connection between stakeholders that are involved in financial capability initiatives. ❻ CHAPTER 6 provides a set of recommendations to the stakeholders, based on the findings of the assessment.

It emphasizes inter-sectorial collaboration, policy and program integration and a greater emphasis on youth participation

❸ CHAPTER 3 outlines the methodology of collecting the data for this publication as well as its limitations. ❹ CHAPTER 4 provides an overview of the current evidence available from research in this field.

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Chapter 1 Introduction The Challenge Developing countries are home to 87 per cent of the world’s youth, of whom approximately 515 million live in extreme poverty and survive on less than $2 a day. Further to this, 152 million live below the poverty line of $1.25 per day and 110 million live in hunger. Child & Youth Finance International (CYFI) is working to change this and is on a mission to provide children and youth around the world with access to affordable financial services, enhance their awareness of economic rights and empower them to build their assets, invest in their future and ultimately break the cycle of poverty. Young people require financial and social investments to fulfill their potential, successfully transition into adulthood, and become active and engaged citizens. Providing young people with the economic and social environment to prosper and with the competences to thrive, has a meaningful impact not only on the lives of those individuals, but also a multiplier effect on their families, their communities and the health of national economies and societies at large.

Child & Youth Finance International (CYFI) Child & Youth Finance International (CYFI) is a non-profit organization driving financial inclusion for vulnerable children and youth. In only 4 years, and with an average annual budget of less than €1.5 million: 

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CYFI has built a global network of over 1,000 partners and collaborating organizations, including national authorities, financial institutions, international NGOs, bi-lateral and multilateral foundations and leading academics active in the field of Child and Youth Finance; CYFI worked with the UNCDF, the OECD and the G20 to drive national financial inclusion strategies around the world; In 2015, 5.7 million young people and 962 organizations in 124 countries participated in activities during the annual Global Money Week celebrations, and rang 67 stock exchanges bells to raise awareness about the financial inclusion of children and youth; CYFI has worked with governments, financial institutions and civil society organizations across 125 countries to assist in changing national policies and developing intervention strategies related to greater financial inclusion and education for children and youth.

Approach to Collaborative Systems Change From the start, CYFI focused on solving complex challenges to youth economic well-being which required large scale thinking, involving a wide range of stakeholders. The current situation - and the barriers on the way to change - are the result of the social, economic and political systems in which we live. As a result, CYFI pioneered a new way of thinking and acting through our Collaborative Systems Change management approach. Uniquely suitable for tackling large scale problems, this new model recognizes that there is not one answer to complex problems, but rather a plethora of smaller efforts working in harmony that propel the entire Movement forward. To drive the necessary change and combat enduring cycles of poverty, a long-term systems change approach is needed. At the center of this Collaborative Systems Change model, CYFI serves as an agent of change - driving innovation, demonstrating proof of concept, sharing knowledge, rallying all relevant stakeholders to the cause, and propelling joint actions. Several CYFI initiatives highlight this approach:

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Global Money Week Global Money Week (GMW) was established to create an engaging global celebration, highlighting the importance of financial inclusion for youth and the work CYFI and our partners carry out. Now our annual flagship event, Global Money Week has raised international awareness of financial literacy, inclusion and empowerment of youth, in an effort to reshape finance and tackle the poverty trap that results from inadequate resources, knowledge, and education.

Global Money Week provides CYFI with a global platform to highlight the key issue of economic empowerment as a means to address poverty through fun and interactive activities, which take place around the world. It offers the initial and enduring means to reach out to stakeholders from a range of backgrounds.

Global Money Week acts in many cases as an introduction to economic rights for children - educating parents, communities, organizations and institutions about the relevance of financial literacy, and creating the will to enact change and ensure young people can become economic citizens. In 2015, 5.6 million children and youth celebrated Global Money Week, with 138 national authorities and 962 organizations participating through over 3,000 activities taking place in 124 countries. In 2016, we expect the celebrations to be even bigger.

Youth Economic Citizenship Barometer (YEEB) At the beginning of 2015 we conducted a baseline evaluation to find out where individual countries (national authorities) and organizations (NGOs, financial institutions) stand in terms of the various stages towards implementation of economic citizenship education and financial inclusion. The results will serve as the benchmark on which we can judge our progress in assisting the various entities in implementing these elements. Furthermore, to facilitate engagement with various entities, CYFI has created the Youth Economic Citizenship Barometer, to provide a more complete understanding of economic empowerment and the necessary process for achieving economic citizenship amongst young people. This benchmarking system focuses on the 4 essential pillars of youth economic empowerment: Financial Education, Financial Inclusion, Entrepreneurship and Employment. We aim to complete this benchmarking for 100 countries by the end of 2016.

Youth Involvement Throughout all of our initiatives, youth representation makes up a core part of CYFI’s collaborative network. This is in order to ensure the needs and capabilities of young people are present as part of the model of systemic change.

CYFI ensures the voices of children and youth are present in all of our projects, programs and during network and international meetings. CYFI believes that youth participation is fundamental to the ecosystem for economic empowerment and will ultimately bring about systemic change. CYFI Youth is a platform, set up by CYFI, for children and youth to take action in reshaping the future of finance. It serves as a bridge between young people and decisionmakers, and encourages children and youth to share their experiences and voice their opinions. In addition, we have a young, energetic staff at our Amsterdam headquarters, coming from many parts of the world. Committed to ensuring the financial inclusion and economic empowerment of young people worldwide, the CYFI Team is working for youth, by youth.

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SchoolBank SchoolBank was developed by CYFI as a response to the need for an efficient project that encourages the active use of bank accounts amongst youth, and prevents the dormancy of accounts which results from a lack of financial knowledge. Bringing together schools, financial institution partners, government parties, local NGOs and other stakeholders, SchoolBank consists of three critical elements that are required to enable children and youth to save, receive and spend money wisely: a) Allowing children to open a bank account, where the school acts as a proxy bank, as an intermediary between the bank and the child, or providing the facilities for direct banking; b) Accompanying educational inputs of Economic Citizenship Education and financial awareness; and c) Ongoing transaction support and technological innovation. Pilots are being set up in at least 10 countries and are expected to reach over 20 million children and youth by 2020

To date, there have been two phases to CYFI’s Collaborative Systems Change approach. The first phase, from 2011-2015, sought to raise awareness about the importance of creating empowered economic citizens in order to address cycles of poverty. During Phase 1, we focused on developing our network of partners and collaborators, building the relationships necessary to foster systemic change. As CYFI enters Phase 2 in the implementation of our Collaborative Systems Change approach, our 2016-2020 strategy will focus on producing more in-depth collaborations, by providing our partners with more technical assistance and supporting their innovative strategies for deepening programs and creating change.

CYFI’s collaborations within our diverse network are, in essence, an ongoing process of co-fertilization - whereby all parties are continuously exchanging best practices and expertise that drive innovation and propel the Child and Youth Movement forward.

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Chapter 2 Terms and Definitions CYFI works with a Theory of Change in the form of a detailed model of economic citizenship. The components of this Theory of Change are laid out in Figure 2.1. The model poses that financial education, social education, livelihoods education and financial inclusion are the building blocks of empowerment and financial capability, which in turn underpin economic citizenship for children and youth. The different concepts that are used in this model will here be defined.

FIGURE 2.1 The CYFI Model of Economic Citizenship ECONOMIC CITIZENSHIP - Reduce income & asset poverty - Economic & social engagement - Sustainable livelihoods - Economic & social well-being - Rights for & responsibilities to self, family and others

First, CYFI defines a child as an individual under the age of 18, or under the age of majority as prescribed by national law, 1 as defined by United Nations Convention on the Rights of the Child. Youth are persons between the ages of 15 and 24 as 2 defined by the United Nations. Financial education includes instruction and/or materials designed to increase financial knowledge and skills. Social education is the provision of knowledge and skills that improve individuals’ understanding and awareness of their rights and the rights of others. It also involves fostering of life skills such as problem solving, critical thinking and interpersonal skills. Livelihoods education builds one’s ability to secure a sustainable livelihood through skills assessment and a balance between developing entrepreneurial and employability skills. Financial inclusion is access to safe, appropriate and affordable financial services. Empowerment is the sense of confidence and efficacy experienced by children and youth through controlling their own lives, claiming their rights, and having empathy toward others. Financial capability 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.

Economic Citizenship Education is a learning framework that combines the three components of financial, social and livelihoods education, providing a benchmark for curriculum developers and education providers throughout the world.

Financial inclusion strategies can be defined as road maps or action plans, agreed upon and defined at the national or sub-national level. Ideally, they are prepared by the public sector in partnership with the private sector and/or civil 3 society so as to encourage broad innovation and development in line with financial inclusion targets.

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Office of the High Commissioner for Human Rights (September 2, 1990). The Convention on the Rights of the Child United Nations (1981). Secretary-General’s Report to the General Assembly, A/36/215, 1981 3 Worldbank (2014). Financial and Private Sector Development. Financial Inclusion and Infrastructure. National Strategies on Financial Inclusion. http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTFINANCIALSECTOR/0,,contentMDK:23218448~menuPK:8711291~pagePK:210058~piPK:2100 62~theSitePK:282885,00.html 2

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According to the OECD/INFE, a national strategy for financial education/financial literacy is “a nationally coordinated approach to financial education that consists of an adapted framework or program, which, at the least recognizes the importance of financial education/financial literacy; Involves the co- operation of different stakeholders as well as the identification of a national leader or coordinating body/council; Establishes a roadmap to achieve specific and predetermined objectives within a set period of time; and Provides guidance to be applied by individual programs in 4 order to efficiently and appropriately contribute to the national strategy.�

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OECD (2012). OECD/INFE HIGH-LEVEL PRINCIPLES ON NATIONAL STRATEGIES FOR FINANCIAL EDUCATION.

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Chapter 3 Compiling Children, Youth & Finance 3.1 Introduction Children, Youth and Finance is the annual compilation of data from partners and collaborating organizations in the CYFI network, along with additional stakeholders around the world, documenting the global progress of financial inclusion, education and entrepreneurship for children and youth. By assessing the collective efforts of financial service providers, government authorities, civil society organizations, multilateral institutions and academics, the report uncovers the barriers to, and opportunities for, early financial access and education for young people throughout the world.

3.2 Compilation With CYFI’s Theory of Change serving as a starting point, surveys were created by the CYFI Secretariat and CYFI Network Working Groups to unravel the features of financial products combined with Economic Citizenship Education programs.

This issue focuses specifically on those programs and products that provide an integrated approach to financial capability; a combination of access to a savings product and to a financial, social or livelihoods education program.

Country Surveys The Country Survey on Financial Inclusion and Education of Children and Youth collects data on national level efforts and activities aimed at advancing access to appropriate financial services and quality education for young people. This survey was distributed to national financial and educational authorities such as Central Banks and Ministries of Education.

Education Survey The CYFI Survey on Economic Citizenship Education (ECE) for Children and Youth collects data about educational products for young people which focus on the different components of ECE, along with saving and enterprise dimensions. The questions followed the rationale of the CYFI Education Learning Framework on ECE. This survey was distributed to civil society organizations and education providers.

Banking Survey The CYFI Survey on Banking Products for Children and Youth collects data on banking accounts which are currently offered to young people, exploring their features as they relate to the Child and Youth Friendly Banking Principles.

The results from each of these surveys are used for chapter 5 which focuses on the outreach of partners and collaborators within the CYFI network.

3.3 Limitations The data collection methodology for Children, Youth and Finance can still be considered a learning process for CYFI. As a network organization, CYFI collects data sets which have, for the most part, not been tracked by organizations thus far.

The surveys compile data from various sources, and present indicators that demonstrate limited internal validity; they are self-reported figures and do not measure 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 holistic ECE programming, and the number of such programs that conduct rigorous monitoring and evaluation. In addition, some institutions are not keen to share their data due to confidentiality considerations. Further metrics and records of children and youth’s financial activities and education must be developed to accurately assess the progress and impact of policies and programs in the field.

The data used to measure the reach of financial education programs created by governments and other national data on savings is limited because a large portion of these analyses do not focus specifically on children and youth. This was the motivation for CYFI to generate surveys for government agencies and financial authorities. The number of government initiated financial education programs, the content of these educational components, the outreach to children and youth, and the impact of the initiatives can only be accurately measured by the direct responses from educational authorities and youth-serving organizations around the world based on comprehensive evaluation and documentation.

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Chapter 4 Building the Case for Economic Citizenship This chapter provides a summary of the evidence that has been found of the impact of financial inclusion, financial education and integrated programming for children and youth. The latter includes interventions that combine education and financial access components, as well as financial education programs that are complemented by life skills or livelihoods components. CYFI encourages such integrated programming as it is central to the CYFI Theory of Change for Economic Citizenship.

4.1. The Macro-Economic Picture of Inclusive Finance and the Informed Consumer Increasingly, developing economies are seeking to promote financial inclusion for low-income households and 5 businesses, as part of their strategies for economic and financial development. This is due to the fact that financial inclusion, or access to a full suite of financial services such as savings, credit and insurance, as well as financial education, has demonstrated macro and micro economic benefits over the years. Moreover, research has shown that low levels of 6 financial inclusion are associated with lower levels of financial literacy.

The degree of financial intermediation has additional positive correlation with growth and employment. The main ways for doing so are generally lower transaction costs and better distribution of capital and risk across the economy. Broader 7 access to bank deposits can also have a positive effect on financial stability. It is noted, however, that since financial inclusion is a multidimensional concept, the macroeconomic effects of financial inclusion are quite contextual. Overall, financial inclusion can meet multiple macroeconomic goals, but macroeconomic gains decrease as both financial 8 inclusion and depth increase, and generate trade-offs with financial stability. A number of studies have suggested both positive and negative ways in which financial inclusion could affect financial stability. This includes the diversification of bank assets (thereby reducing their riskiness), the increased stability of the deposit base (reducing liquidity risks) and the improved transmission of monetary policy on the positive side of the spectrum. The erosion of credit standards (e.g., subprime mortgages), bank reputational risk, and inadequate regulation of MFIs are listed on the negative side. Overall, 9 however, studies find that the two are complementary rather than there being a trade-off between them. Moreover, a recent empirical analysis on income concludes that financial inclusion contributes to reducing income inequality to a 10 significant degree, while the size of the financial sector does not.

A recent analysis of financial inclusion in Africa suggests that financial literacy is the element needed to sustain the 11 economic effects of reducing financial exclusion. It could also be suggested, based on evidence from the Western world, that financial inclusion is the element needed to sustain financial literacy. Linked to the above, financial literacy itself has therefore also been mentioned as a crucial element of the proper functioning of any society. It has shown that financial literacy improves decision making and that the cost of "Financial Ignorance" equals losing out on funds for 12 retirement, losses in the stock-market and weaker management of consumer liabilities.

4.2 Evidence on the Impact of Financial Inclusion and Financial Education of Children and Youth 13 Linking this to the macro- economic impact of youth accounts, it must be noted that when financial institutions include lower-income customers, the only way that they can achieve short-run profitability is by lending to these customers at high-rate subprime loans which, if not underwritten carefully, can cause cyclical instability for the banking system. This is a reason for banks to be reluctant to offer youth accounts, particularly to the non-affluent. Since young people cannot 5

Morgan, P.J. & Pontines, V. (2014).

See Atkinson, A. & Messy, F (2013) 7 CGAP (2014) 8 IMF (2015) 9 Morgan, P.J. & Pontines, V. (2014).

10 Garcia-, A. & Martinez Turegano, D. (2015).

11 Chijioke Kennedy Oji (2015).

12 Lusardi, A & Mitchel, O. (2014).

13 This Evidence was compiled from literature from 2014 and 2015. For a review on previous evidence on financial education and inclusion, see Sherraden & Ansong (2013) Research Evidence on the CYFI Model of Children and Youth as Economic Citizens.

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borrow, banks have no way to offset losses on low-balance accounts for many years. However, it would not be right to conclude that youth accounts contribute to macro instability except, insofar as their short-term unprofitability can increase losses of banks during macro-economic downturns. Moreover, evidence indicates that access to products could render benefits for the child later in life.

Box 4.1. Summary of previous research findings of early financial capabilities of children and youth14 Impacts of Financial Inclusion  Gradually, the body of evidence for family assets and savings, development accounts and individual accounts for 15 16 young people is growing. All in all, the results of these studies are positive and savings behavior and educational 17 impacts are mentioned among key outcomes. It remains to be seen whether financial inclusion, in its many forms, may also be linked to increased confidence, outlook on the future, employment for youth and youth’s entrepreneurial pursuits.

Impacts of Financial Education  Effects on financial knowledge appear to take place across the board, but reports on effects of financial education 18 alone on financial attitude and behavior are still inconclusive. However, results show that by the age of seven 19 years, several basic concepts relating broadly to later ‘finance’ behaviors will typically have developed”.  A range of situation specific features may be related to the impacts of financial education, including location, voluntary nature and delivery method of courses, which may or may not affect the outcomes of treatment. There is still little confirming research on what encompasses effective financial education and whether increasing financial 20 literacy in young people will lead to actual better financial outcomes and behavior.  Some features have been identified as potentially having a complementing effect, such as learning while doing, and 21 soft skills building.

Impacts on Financial Capability; Complementing Financial Access with Financial Education  Practice has long been seen as a key component in learning and needs to be taken into consideration. Although the evidence on the concept of “financial capability” is still in development, it has long indicated that teaching children financial capability in a “learning while doing” approach could generate benefits over teaching ‘financial’ knowledge 22 alone.  Existing opportunities for parents, schools and teachers to support a child’s financial capacities to defer gratification and familiarize them with finance, all aid the development of a child’s executive functions, underpinning their financial habits and behavior.

Complementing Financial Education with other Life Skills 23  Despite a broader movement from the lecture-based approach to education to a more practice based education , studies on complementing financial education with other practical life skills are rare.  Those studies that are available are predominantly showing positive results as evidence suggests that there are benefits to using a multi-pronged approach to empower youth, including a financing or coaching component, 24 proves to be more beneficial and have more impact on youth.  This resonates with findings that a financial education program complemented with a life skills component had the biggest effect on financial behavior. Moreover, gender may potentially play a role in the effect of combined interventions. Girls may benefit more from a multi-pronged approach than boys do, but more evidence is 25 necessary. At the least, there is a greater availability of this evidence for girls.

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This evidence compiled from literature between 2012 and 2014.

For a review on previous evidence on financial education and inclusion, see Sherraden & Ansong (2013) Research Evidence on the CYFI Model of Children and Youth as Economic Citizens.

16 See Friedline, T. (2014).

17 See Friedline, T., Elliott, W. and Chowa, G. (2013) 18 See O Prey, L. & Shephard, D. (2014).

19 Whitebread, D. & Bingham, S. (2013) 20 See Miller, M., Reichelstein, J., Salas, C. and Zia, B, (2014), Luhrmann, M., Serra-Garcia, M. and Winter, J. (2013), & Bruhn M., Zia, B. Legovini, A. and Marchelli, R. (2013).

21 See O Prey, L. & Shephard, D. (2014).

22 See Schug, M.C., and Birkey, C.J. (1985), Sherraden & Johnson (2006), Jamison, J. Karlan, D. and Zinman, J. (2014) & CFED (2014) 23 World Economic Forum (2009).

24 See O Prey, L. & Shephard, D. (2014).

25 See Bandiera, O., Buehren, N., Burgess, R., Goldstein, M., Gulesci, S., Rasul, I., & Sulaiman, M. (2012) and Austrian, K. and Muthengi E. (2013).

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4.2.1 Financial Inclusion and Access to Savings 26 First, key findings from the Innovations to Poverty Action Financial Inclusion Program, which seeks to identify effective solutions to promote healthy financial behavior, showed the effects of savings boxes, through Rotating Savings and Credit Association in Kenya, on increasing members’ spending on preventative health measures.

The program also showed how the individually owned commitment savings accounts of married women in the Philippines, with traditionally low bargaining power, increased their expenditure on household assets such as sewing machines and that access to microcredit, through joint liability loans, could increase revenue for microenterprises in Mexico through joint liability loans. Moreover, several results listed below were found specifically pertaining to children and youth. Some of these confirm the results that were found previously (pre 2014, see Box 1) and some build further on these results.

Second, a study in Kenya examined the effect of expanding access to bank accounts by providing free accounts to 885 households, documenting positive spillovers for both adults and their children. Households that received access were less reliant on grown children and siblings living outside their village, and became more supportive of neighbors and friends 27 within their village.

In line with previous results, researchers found significant and sizable effects of the Ghana YouthSave experiment on savings performance, exploring the experimental impact of in-school banking and financial marketing outreach on the savings performance of youth in schools in Ghana (i.e., “taking the bank to the youth”). Youth in treatment schools 28 performed better in terms of account opening, depositing, and savings than those in control schools.

A study using the Grameen bank model to analyze the effect that microfinance had on poverty reduction aimed to explore the contribution of microfinance products such as microcredit, micro insurance and micro saving to youth in Kenya. Findings confirm that micro financing influenced economic status, decision making power and knowledge and was 29 effective in graduating poor youth and the middle class “to higher living standards”.

A recent study in Nepal that looked into whether financial inclusion may bring changes in the lives of the poor that go beyond financial outcomes concluded that it may increase the perceived ability to control one's financial situation. In addition, pertaining to youth and partially confirming some of the previous findings (in Box 1) results suggest that offering a savings account to people increases the educational attainment of girls, and parental educational 30 aspirations and expectations for these girls.

Finally, results were reported for the first longer-term experimental evidence on the impact of a matching incentive program on retirement saving in Tulsa, Oklahoma. Although the Tulsa IDA program provided a vehicle and a matching incentive for participants to save and showed positive impacts for school enrollment, the IDA program had no impact on the propensity to hold a retirement account, the account balance, or the sufficiency of retirement balances to meet retirement expenses. The IDA program included financial education, encouragement to save, and matching funds for several qualified uses of the saving, including contributions to retirement accounts. The lack of impact for savings may be explained by a lack of several key factors that have been shown to improve retirement saving rates. This is not surprising because one would not own a retirement account until much later in life, given developmental and life course perspectives. It would make sense that for children and youth, other types of financial products are of a greater priority – 31 checking and savings accounts, links with educational outcomes, etc.

4.2.2. Impact of Financial Education Programs Studies looking into the impact of financial education found results that confirm previous findings of financial education programs. Impact had been measured along financial literacy scores, involving improved financial knowledge, attitudes and behaviors, including credit scores, as well as inter-temporal choice.

Financial Literacy: Impacts were found on performance on financial literacy tests through a 10-hour financial education 32 program among 15-year-old students in compulsory secondary schooling in the United States.

26

IPA (2015).

Dupas, P. Keats, A. & Robinson, J. (2015).

28 Lee, Y., Johnson, L. Sherraden, M., Ansong, D., Osei-Akoto, I., & Chowa, G. A.(2015).

29 Omunjala, B. S. & Fondo, F. (2014).

30 Chiapa, C., Prina, S. & Parker (2014).

31 Grinstein-Weiss, M. Sherraden, M. Gale W.G., Rohe, W.M., Schreiner, M. Key, C. & Oliphant, J.E. (2015)."

32 Hospido, L. Villanueva, E.& Zamarro, G. (2015) 27

20

Children, Youth & Finance 2015

Savings Attitudes and Behaviors: Significant impacts were found for savings behavior in Ghana, due to the fact that 33 children moved their savings from home to school; on positive long-term financial behaviors (e.g. more saving, better retirement planning) in the US through financial education, assessed by using data from the 2012 National Financial 34 Capability Study (NFCS) ; and on higher relative credit scores and lower relative delinquency rates for in school youth after the implementation of a financial education requirement subsequently having used a panel of credit report data 35 in Georgia, Idaho, and Texas. Notable improvements in credit outcomes for young adults who take personal finance courses in high school were also discovered in the same three states following the implementation of the state 36 mandated financial education programs. Finally, impacts were also found on teenagers’ interest in financial matters and increased financial knowledge, especially their ability to properly assess the riskiness of assets, after receiving a short financial education program in German high schools. Behaviorally, a decrease in the prevalence of self-reported impulse 37 purchases was perceived.

Inter-temporal choice: Impacts were found when 1,000 students were randomly assigned and their inter-temporal choices measured using an incentivized experiment. Inter-temporal choice is an economic term describing how an individual's current decisions affect what options become available in the future. The findings suggested that financial 38 education can have significant effects on inter-temporal choice already at a young age . Theoretically, by not consuming today, consumption levels could increases significantly in the future, and vice versa.

Note on Empowerment and Added Life Skills It is suggested that certain soft skills could be added to financial education or the use of financial products that could encourage individuals to use the products better, generate more financial impacts or generate broader livelihood impacts, such as the creation, securement or retention of employment. A recent study underlined the importance of financial education to empower customers so that they use the services in a way that benefits them best. Customer empowerment is defined as “a process involving interactive relationships between the service providers and their 39 customers that build trust and strengthen customer confidence.” The premise of the study is that when customers are empowered, they make more informed choices, trust the institutions they interact with, are comfortable using those financial services they value, and feel more in control of their financial lives.

Research on adolescent girls, building on results in Box 1, shows that programs that include social skills and cross sectorial topics tend to have more positive impacts and generally create more active participation. There is evidence that including themes such as health, leadership, and livelihoods can complement integrated programs even further.

Research conducted in 2010 in Zimbabwe and Tanzania on CAMFED’s integrated program found that 93 per cent of businesses started with CAMFED business grants earned a profit, with 92 percent of young women surveyed putting 40 some of their profits back into their businesses and nearly 83 percent contributing to essential household expenses”.

4.2.3. Financial Capability: Evidence on Complementing Education with Financial Access The interplay between financial inclusion and financial education has led some to embrace the concept of “financial capability” as having both individual and structural components. To be financially capable, people must have financial 41 knowledge and skills as well as access to appropriate financial services to enhance social and economic well-being. Two recent studies build on the conclusions in Box 1 and corroborate this thesis.

First, another study on Individual Development Accounts (IDA) considers the impact of an added financial education dosage on savings outcomes of participants. It analyzes data from a sample of approximately 2,000 participants in the American Dream Policy Demonstration and finds that, IDA participants who completed program requirements for financial education had higher average monthly savings, saved a higher portion of their income, and deposited savings more frequently. Notably, dividing by age, it is found that participants aged 36 or older experienced increasing returns on investment in financial education. However, younger participants with more than the required input are found to experience a diminishing return on their investment in financial education. Researchers conclude that this finding

33

Berry, J, Karlan, D. & Pradhan, M. (2015).

Wagner, J. (2015) 35 Brown, A. Collins,M.J. Schmeiser, M.D. Urban, C. (2014) 36 Urban, C. Schmeiser, M. Collins,J.M Brown, A. (2014).

37 Lührmann, M. ; Serra-Garcia, M. ; Winter, J. (2015).

38 Lührmann, M, Serra-Garcia, M. Winter, J. (2015).

39 Riquet , C. (2015).

40 Camfed (2014). “Business training and financial literacy”. Acessed March 17th, 2015 on: https://camfed.org/what-we-do/training/ 41 Sherraden & Ansong (2013), p. 4.

34

Children, Youth & Finance 2015 21

suggests that IDA programs should consider the population carefully when designing and targeting financial education 42 components: content and duration should be determined by the knowledge and needs of participants.

A second study aims to establish the effect of financial education as a component of the children and youth savings account in Kenya. A survey was conducted among 36 commercial bank branches in Nakuru town. The findings suggest that provision of financial literacy to children and their parents or guardians increases the effectiveness of youth savings .43 accounts in impacting financial management skills and financial well-being Last, an article examining the impact of the MyPath Savings pilot on economically disadvantaged youth participating in a youth development and employment program indicates that MyPath Savings is highly relevant to participants’ needs.

MyPath Savings targets youth earning their first paycheck—a critical “teachable moment” to promote savings and connect youth with mainstream financial products. Youth also experienced significant increases in financial knowledge, 44 financial self-efficacy, and the frequency with which positive financial behaviors were carried out.

4.3 Conclusion In sum, the results of recent research, building on previous research conclusions summarized in Box 1, demonstrates positive impacts of early financial inclusion and education for account opening, depositing, and savings, as well as having control of one's financial situation. However, it does not show effects for owning a retirement account. Financial education shows impacts for financial literacy, financial attitudes and behavior as well as inter-temporal decision making. Combined approaches suggest a positive impact on savings outcomes and financial well-being, leading to greater financial empowerment and more informed choices.

42

Grinstein-Weiss, M. Guo, S. Reinertson, V. & Russel, B. (2015) Alex, K. & Amos, A. (2014) 44 Loke, E. Choi, L &Libby, M. (2015).

43

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Children, Youth & Finance 2015

Children, Youth & Finance 2015 23

Chapter 5 Advancing Economic Citizenship through the CYFI Network The CYFI Network is comprised of national authorities, civil society organizations, academics and financial institutions.

This chapter provides an analysis of the features of their programs related to Financial Inclusion and Economic Citizenship Education. It additionally highlights some of the changing trends in the adoption of these features over the last few years.

5.1 Economic Citizenship Education Programs This first section summarizes all features of education programs provided by partners and collaborators in the CYFI network. Information was collected from civil society partners and some financial institutions who are engaged directly in educational programming. The CYFI Survey on Economic Citizenship Education for Children and Youth collected data on educational programs and materials which focus on the different components of the ECE Learning Framework.

FIGURE 5.1 Materials used in programs

22,09%

24,76%

19,54%

14,75%

27,91%

23,81%

29,89%

34,43%

50,00%

51,43%

50,57%

50,82%

7,46% 16,42%

26,51%

76,12%

Open Source

14,46%

59,04%

Paid Source

19,67%

4,35% 21,74%

17,95%

27,87% 73,91% 52,46%

17,95%

64,10%

21,11% 28,89%

50,00%

Both

Source: CYFI 2015





24

The findings indicate that at least 50 per cent of survey respondents reported to make the educational materials used in their programs available open source. Only one quarter of respondents offer their materials in any given category through a combination of open and paid sources. This represents an increase in availability in the industry of ECE related learning materials, which is encouraging for project developers keen on replicating or drawing inspiration from existing materials. Not surprisingly, the majority of the materials that are available online (videos, online games and online teaching resources) are available as open source.

Curriculum development tools and teacher training guides are the materials with the highest portion of paid access, with 34 percent of respondents offering these tools as a paid source. These materials, and related services, represent a significant source of income for education providers and are least likely to be made available open source as organizations aim to maintain their competitive advantage in capacity building and curriculum development.

Children, Youth & Finance 2015



43 per cent of all programs exclusively target youth who are older than 15 years and approximately 56 per cent of all programs target young people under the age of 15. Despite considerable attention given to youth economic development programming from multilaterals and donors, especially for those in the 1630 age range, it is interesting to note that organizations within the CYFI network are still placing a priority on serving young people under the age of 15. Around one third of programs specifically target children between 614 with 9 percent of programs targeting children 5 and under. Only 3 percent of all survey respondents target each age segment.  The number of programs targeting youth under 15 is indeed encouraging, but the comparative lack of programming from survey respondents for those under the age of 10, and especially under the age of 5, is something to be improved. While there have been some innovative programs bringing basic financial, social and citizenship concepts to pre-school and primary school students, these are in short supply.

Given the research evidence described in Chapter 4, a greater number of programs should be designed and offered to the younger age segment.

ECE AGE LEVELS IN PARTNER PROGRAMS

8%

Financial and Livelihoods 6%

10-15

41% 6-14 15+

27%

All Ages

Source: CYFI 2015



Financial and Social 21%

6-9

15%

Financial Education 18%

All Components 47%

0-5

3% 6%



FIGURE 5.3 Educational Components

Not Applicable 8%

FIGURE 5.2 ECE Age Levels in partner programs

Of the ECE respondents in 2015, less than 20 per cent concentrate exclusively on financial education. More than a quarter of respondents integrate financial education with one other ECE component: 21 percent combine financial education with social education and just about 6 per cent of respondents combine financial education with livelihoods education.

Almost half of all ECE survey respondents in 2015 reported that they were integrating financial, social and livelihoods components into their educational programming. This is quite encouraging as it demonstrates the willingness of civil society organizations to offer holistic educational programs that are consistent with the Economic Citizenship Education framework.

Source: CYFI 2015

Children, Youth & Finance 2015 25

FIGURE 5.4 Educational Elements per Component

101

96

55

58

63

66

75

77

98

102

FINANCIAL EDUCATION ELEMENTS

54

23

23

30

39

41

45

55

56

64

LIVELIHOOD EDUCATION ELEMENTS

75

74

68

46

39

46

58

70

73

83

SOCIAL EDUCATION COMPONENTS

Source: CYFI 2015



26

The elements that are prioritized in the financial education component by respondents are financial decision making and savings behavior with a response count of 102 and 101 respectively. Planning and budgeting (98) and money and value (96) were also frequently mentioned as components in educational programs. Since 2012, planning and budgeting, savings behavior and financial decision making have consistently been the topics most commonly found in the financial education programs of survey respondents.

Children, Youth & Finance 2015











The least focus has been given by respondents to topics related to sharing and donations (58) and financial law and regulation (55). These results are consistent with the findings since 2012, with sharing and donations and financial law and regulations, along with financial negotiations and economic environment, representing topics that are least covered in financial education programs.

For the livelihood education component, most respondents include some form of entrepreneurship element, with social entrepreneurship and business plans for entrepreneurs receiving 55 and 54 response counts.

Entrepreneurship has consistently ranked high since 2012, along with career mapping and employability skills.

The least incorporated elements in livelihood education are job search skills (30) and employer and employee responsibility (23). These three topics have also been the least included by respondents since 2012. The is likely due to the fact that while financial education programs may include an entrepreneurship element, they often do not prioritize the need for young people to address securing and retaining employment, nor the importance of business ethics or fair labor conditions.

Corner stones of the social education component are knowledge acquisition and decision-making (83), leadership and team work (74) as well as developing self-esteem, personal interests, skills, and goals. These topics have consistently been included most in the education programs of respondents since 2012.

Psychological development, human rights and conflict management are the elements that were least included within the social education component in 2015. Since 2012, these topics have also ranked low amongst respondents along with environmental responsibility and basic health and nutrition. This can be attributed to the fact that many different complementary subjects get included as “social education” in ECE related programming, with many programs simply not able to incorporate all of these topics in one focused program.

FIGURE 5.5 Percentage of programs involving a savings component

46% 54%



Savings Component No Savings Component



Source: CYFI 2015

54 per cent of survey respondents reply that their educational programs included a savings component at either at formal financial service provider or through a non-formal savings model. This is an increase from 2012, when only 31 per cent of programs reported an integrated savings component to their educational programs, demonstrating the growing recognition of the importance of including an active savings dimension amongst civil society actors.

Of those financial education programs that link a formal or non-formal savings component to their program, it was found that 90 per cent have a social component and 85 per cent have a livelihoods component in their education programming. This is encouraging as it shows that the push for financial inclusion and educational programming for children and youth is also including social and livelihoods elements to complement core financial literacy competencies.

In addition, the two regions that reported the most programs that included a savings component were Europe and Central Asia and Sub-Saharan Africa. This can be explained by the relatively high levels of financial inclusion in Europe along with the increase in programming and donor initiatives to advance financial access in Sub-Saharan Africa.

Children, Youth & Finance 2015 27

FIGURE 5.6 Behavior Change in Teachers Reported after Program



TEACHERS AND FAMILY ENCOURAGED TO SAVE

Encourage d to Save

39%

61%

As shown in Figure 5.6, almost two-thirds of ECE partners reported that family and teachers were encouraged to save as part of their educational program. This shows progress as this element never counted for more than half of the respondents in the ECE sample in past years. This is consistent with the core objectives of the participatory learning element of ECE, where young people, families and teachers are all involved in the learning process together. This ensures that positive financial knowledge and behaviors are not only acquired amongst youth but amongst adults as well.

Not Encourage d to Save

Source: CYFI 2015

FIGURE 5.7 Enterprise Participating Linked to Educational Components Not Partaking in Financial Enterprise

Partaking in Financial Enterprise 79%

64% 58%

56%

52% 44%

42%

48%

36% 21%

Savings Component

No Savings Component

Livelihoods Component

No Livelihoods Component

Social and Livelihoods Component

Source: CYFI 2015



28

Other encouraging findings include the link between savings, ECE and enterprise participation. Figure 5.7 shows that when a savings component is added to an education program, there is an increase in youth participation in enterprise. This increase is even more pronounced when there is a deliberate inclusion of livelihoods education.

However, when a social and livelihoods elements are included there is a drop in youth participation in financial enterprise. This can be explained by the fact that when there is a conscious decision to include social education in a financial and livelihoods program, there is more of a tendency to report that youth are involved specifically in social enterprise. The findings indicated that those programs that report a savings component, financial education, livelihoods education and social education, 55% report that youth are engaged in social enterprise.

Children, Youth & Finance 2015

FIGURE 5.8 ECE Programming with a Specific Adolescent Girl Focus and that encourage financial or social enterprise

46%

35%

54%

65%

Yes

No

Children Encouraged

Children Not Encouraged

Source: CYFI 2015









Regarding specific gender considerations, the sample shows that more than half of the organizations responding to the ECE survey do have a specifically focus on adolescent girls. Compared to the 21% of national authorities that report this in the national authority survey on financial education, this is a relatively high percentage, indicating that the vulnerability of this group is perceived by the NGO sector.

Regulation and policy have not always reflected the importance of investing in adolescent girls as a specific target 45 group. Most national and global initiatives target "gender" as a holistic concept with no consideration of age, 46 developmental stage, vulnerability or psychological and emotional needs. However, restrictions on access to social 47 and financial resources are still more limiting for girls than for boys and most regulations and policies do not 48 address specific provisions for adolescent girls between the ages of 12 and 19. Adolescence is a crucial stage in rapid social, physical, and emotional development.

A little over half of these programs link a savings component to the provision of education, while nearly two thirds encourage financial or social enterprise for girls as part of the program. This indicates that these adolescent girls are in fact receiving integrated programming and are gaining enterprise experience.

It is essential though that all youth serving organizations consider the age and developmental stages of adolescent girls when creating and adapting financial services and/or integrated programs. Special attention should be given to each subgroup and their needs (early and late adolescent). Marginalized and most vulnerable girls should specifically be included in broader programming schemes.

Conclusions and Trends:  The data indicates that there has been an increase in open source ECE related learning materials across the industry, with the majority of these open source materials being those that are available online (videos, online games and online teaching resources). It also shows that organizations are more inclined to keep curriculum development tools and teacher training guides as paid resources so they can maintain their competitive advantage in offering capacity building and curriculum development services.  The number of organizations in the CYFI network targeting youth under 15 is indeed encouraging, but the comparative lack of programming from survey respondents for those under the age of 10, and especially under the age of 5, deserves greater attention. With many research studies showing the importance of building financial behaviors at an earlier age, more organizations should be investing in the development and contextualization of learning materials for those at the pre-school and primary school level.  Since 2012, there has been an increase in ECE survey respondents indicating that they are offering all 3 components of the ECE learning framework along with an increase in respondents indicating that their programs are 45

UNICEF. (2006).

Amin, S., Austrian, A., Chau, M., Glazer, K., Green, E., Stewart, D., & Stoner, M. (2013) 47 Morrison, A. and Sabarwal, S. (2008) 48 UNICEF (2011) 46

Children, Youth & Finance 2015 29







incorporating either a formal or a non-formal savings component. This is encouraging as it shows that the push for financial inclusion and educational programming for children and youth is also including social and livelihoods elements to complement core financial literacy competencies.

Since 2012, planning and budgeting, savings behavior and financial decision making are the most cited financial education topics from survey respondents, with sharing/donations and financial law/regulations, along with financial negotiations and economic environment, being the least cited. For social education it has been knowledge acquisition and decision-making, leadership and team work being most cited, with psychological development, human rights and conflict management being the least. For livelihoods education, business plans for entrepreneurs and social entrepreneurship have been the most cited, with job search skills and employer and employee responsibility being the least. This demonstrates that financial education is still dominated by personal financial management topics, with a greater need for programs to concentrate on understanding economic systems and the positive role of philanthropy. It also shows that social education is being used to build leadership and self-esteem but that not enough programs are consciously addressing human rights and conflict resolution as integral components of economic citizenship. Finally, the results show a strong emphasis on entrepreneurship (including social enterprise) within livelihoods education but that skills needed by young people to secure and retain employment, along with the importance of business ethics and fair labor conditions, are often neglected.

The results show an encouraging trend with the link between savings, ECE and enterprise participation. Most notably, when a savings component is added to an education program, there is an increase in youth participation in enterprise. This increase is even more pronounced when there is a deliberate inclusion of livelihoods education.

Finally, a greater number of ECE survey respondents than national authorities indicate that they include a specific gender component to their educational programming. Further encouraging results show that these adolescent girls are in fact receiving integrated programming and are gaining enterprise experience through these projects.

5.2 Financial Institutions This section summarizes features of financial institutions in the CYFI network that responded to our CYFI banking survey.

The following information was collected from financial institution partners. The data presented explores their features as they relate to the Child and Youth Friendly Banking Product criteria. These criteria will be discussed throughout the chapter.

FIGURE 5.9 Availability and Type of Products offered by Financial Institutions

17%

Savings Account

39%

39%

Yes

Savings and Current Account

No

N/A

83% 22%

Source: CYFI 2015

 

30

The results show that 83 per cent of survey respondents offer banking products for youth under 18 and of these institutions almost 40 per cent offer only savings accounts and 22 per cent offer both savings and current accounts.

Of those financial institutions that offer an account to those under the age of 18, 50 per cent offer accounts for those aged between 15 and 18, 40 per cent offer accounts for those between 10-14 and 30 per cent report to offer accounts for those aged 10 and under. Only 18% offer accounts to all these age segments. This indicates that even though the 15-18 age segment is still the main focus for financial institutions in the sample, the younger age segments are also seen as a valuable segment to target. This resonates in the research findings that starting to interact with the financial system at a young age is beneficial.

Children, Youth & Finance 2015

FIGURE 5.10 Control of the Account Holder

FIGURE 5.11 Staff Training Offered

Full Access

43%

43%

No Access (cannot transact until 18) Partial Access

Yes

43% 57%

No

14%

Source: CYFI 2015

Source: CYFI 2015

FIGURE 5.12 Educational Component Linked to the Account



14% Yes

No

86%



43 percent of banking institutions grant youth under 18 full access to accounts and, in total, 86 per cent of institutions in the sample that offer accounts provide at least partial access for youths under 18. Only 14 per cent of respondents do not allow children to transact upon their accounts until the age of 18. Partly, this has to do with the legal landscape and regulatory barriers but may also be due to institutional policy.

57 per cent of banking institutions responded that they provide special training to their staff to specifically deal with children and youth. While it is encouraging to see the majority of institutions invest in building the capacity of their staff to specifically address young clients in a Child Friendly manner, there is still a significant number that still do not feel such training is worthwhile.

Source: CYFI 2015



The results also show that the vast majority of products offered to children and youth are also connected to a financial education component. However, financial institutions are not as inclined as civil society organizations to offer a holistic educational program offering two or three elements of the ECE learning framework. Of those that offer an educational component, only 14 per cent report to combine financial education with social education and only 10 per cent report to combine it with livelihoods education. Only one respondent indicated that they offered all three elements of ECE. This indicates that social and livelihoods education, as complements to financial education, are not often a focus for financial institutions. This may be linked to the fact that these subjects require a particular expertise that FIs do not have in house, or have simply not considered. Working in collaboration with civil society could potentially solve this problem and allow for financial service providers and education experts to combine their efforts to provide young clients with a more enriching educational experience.

Conclusions and Trends  The results show that a majority of banks have chosen to invest in training their staff on dealing with young clients.

This shows a willingness to understand this population, as one with specific and unique concerns when interacting with the formal financial system. This is a feature that CYFI would like to see replicated on all existing bank accounts for young people  The fact that 86 per cent of the products are linked to a financial education component points out to the understanding by financial institutions that an integrated approach to both financial education and financial inclusion has the potential to yield benefits for the young and the financial system alike. However, there is still an

Children, Youth & Finance 2015 31





important work to be done on the evaluation of the quality of these education materials and to further encourage their overall coverage of the ECE learning framework.

However, only a small percentage of financial institutions answer that youth require civil/legal recognition (age majority) to operate the bank account. It is important to note that there is still a lot of work to be done in terms of innovation on regulatory frameworks, so this not only allows, but also encourages, the inclusion of children and youth in the financial system.

It should be noted that, when analyzing the data from the CYFI Banking Survey, the sample is comprised of financial service providers connected to the CYFI network. Thus, the results of their bank account offerings, and the degree to which accounts are offered under an integrated approach with financial education, is not necessary representative of the financial sector as a whole. Rather, it is indicative of financial institutions that are already interested in the topic. It is clear, however, that the sample of respondent financial institutions has diversified over the years, representing many new countries and regions, which may indicate that the interest in the topic of youth finance has increased.

5.3. National Authorities in the CYFI Network This section summarizes all features of programs provided by government authorities in the CYFI network. Information was collected from central banks, ministries of finance and education, who were sent a basic survey on their involvement in national strategies and financial education programs.

5.3.1 Financial Education FIGURE 5.13 lnstitutions involved in Financial Education Programs for those under 18 and Specific Age Segments Targeted

7% 3% 5%

Age 0-5 Age 6-9

26%

Yes

28%

Age 10-15

33% Age 6-14

No

74%

Age 15+

24%

All Ages

Source: CYFI (2015) 



32

Figure 11 provides an overview of the national authorities’ involvement in an overarching national program or strategy on financial education. The results indicate that nearly three quarters of respondents from national authorities are, in fact, an executor or co-executor of a national program on financial education with a focus on children and youth. By extension, the majority of survey respondents reported to personally be either the principal coordinator or to be responsible for the implementation of the national strategy on financial education.

Of those national authorities that report to have a financial education programs, 75 per cent of the sample were from regions of Europe & Central Asia and Asia & the Pacific (50 and 25 per cent respectively). 62 per cent of the sample reported to focus on programming that was reaching children in primary or early secondary school, while 28 per cent indicated that they were focussing specifically on programming for those 15 and older. Only 7 % of respondents indicated that they targeted all age segments with their education programs and only 3 % target the youngest segment aged 0-5. Despite the evidence presented in Chapter 4 that beneficial results can come when children are exposed to elements of ECE at an early age, many programs in the CYFI network do not yet place a significant focus on services for those under the age of 10. More evidence is needed as to why this is the case and organizations, particularly Government Education Authorities, should be further encouraged to develop materials specifically aimed at this younger age demographic

Children, Youth & Finance 2015



FIGURE 5.14 Financial Inclusion Component Integrated in Financial Education Program

Formal component

26%

36%

Non-formal component No component

21%



17%

Not Applicable

Source: CYFI (2015)



FIGURE 5.15 Educational Components Financial and Social

15% 5% 41%

Financial and Livelihoods All Components

21%

18%

Not Applicable Financial

Based on the increasing evidence, presented in chapter 4, indicating that financial education programs with an active savings component are more beneficial to young people than simple knowledge based financial literacy, CYFI advocates for an integrated approach to financial literacy and financial access for children and youth. Figure 12 indicates, just over half of national authorities report that the financial education program they are executing currently includes a savings component. 36 per cent of national authorities indicate that they link this program to a formal savings account and 17 per cent report to link it to a non-formal one.

While this is an encouraging trend, 21% of respondents reported not to be actively linking the access and the education components, indicating that, even within the CYFI network, the integrated approach to building economic citizenship is still not being fully pursued. It should be noted, however, that some respondents that indicated not to link their program to any savings component often reported that this is because a different institution is offering this component.

Figure 13 further explores how different ECE components of financial, social and livelihoods education are incorporated into financial education programs executed by national authorities. 41 per cent of respondents reported to still include only the financial component in their programs. This result may indicate that a majority of government partners in the CYFI network are concentrating on financial literacy and do not yet see the benefit of adding key life skills or entrepreneurship components to traditional financial education programming. Regarding the social education component it is relevant to point out that in an important number of cases (especially in Latin America) social education is not reported as a component of national financial education programs, but it is contained as part of the national curriculum.

Source: CYFI (2015) 



It is also interesting that these results indicate that more financial education programs are combined with social education (15 per cent) than with livelihoods education (5 per cent). Even though the evidence on both these complementing aspects is still developing, it would be relevant to look further into why livelihoods education is somewhat lagging behind or why it is not necessarily seen as a beneficial complement to finance. Financial knowledge, for example, increasingly shows to be a key component in successful entrepreneurial activity.

The elements that are mentioned most often to be included into financial, social and livelihoods education by national authorities are (respectively) savings behaviour, money and value, financial decision making and planning and budgeting. The least mentioned are sharing and donations and financial law and regulations; for social education leadership and team work and knowledge acquisition and decision making. The least mentioned is psychological development, conflict resolution and human rights. For livelihoods education the most mentioned are entrepreneurial skills and career mapping, least mentioned are employer and employee responsibility. These trends are similar to those found in section 5.1 on ECE programs from civil society.

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5.3.2. Financial Inclusion CYFI works with national authorities in these countries to ensure that financial inclusion for young people is not forgotten on national strategic agendas. While financial inclusion, even for young people, may not be a pressing issue for certain countries given the relative maturity of their financial services sector, CYFI considers a coordinated response to financial education to be incomplete without a focus on increasing access to Child and Youth Friendly financial services for those under the age of 18.

FIGURE 5.16 Institutions Involved in Financial Inclusion Programming & Their Focus on Under 18s

5% Focus Under 18

35%

Yes

Yes No

No 65% 95%

Source: CYFI (2015) 

Figure 14 indicates that an overwhelming 95 per cent of national authorities that responded are involved in a financial inclusion programs or strategies. It should be noted that 80 per cent of the respondents came from the regions of Sub-Saharan Africa and Asia & the Pacific (50 and 30 per cent respectively) Of this sample, 65 per cent reported to focus on those under the age of 18 within this strategy. Even in countries where financial inclusion of young people is close to 100 per cent, the availability of safe, age appropriate financial products, that meet CYFI’s Child and Youth Friendly Banking Standard is by no means a given. The creation of a financial inclusion strategy or program targeted at youth is therefore still a key point of advocacy. Reversely, in other countries, children and money are still considered uncomfortable or even controversial topics. It is in these countries where financial inclusion strategies focused on young people could create large opportunities to break taboos, especially for young people who are working to support themselves and their households.



FIGURE 5.17 Methods to Promote Financial Inclusion 10 9 8 7 6 5 4 3 2 1 0

9

4

4

3

Awareness campaigns

Source: CYFI (2015)

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School visits or partnerships with schools

Legislation that Advantages for banks encourages access to that provide access to finance at a young age young children while also maintaining child protection

SchoolBank program



Figure 15 shows the methods that national authorities use to promote financial inclusion and it can be seen that awareness campaigns and school visits are most popular methods used. Programs linked to financial institutions, such as a Schoolbank programs and bank advantages were also mentioned. Legislation to encourage financial access was mentioned least. While evidence has shown this to be an effective method to advance financial inclusion, it requires a simultaneous increase of consumer protection regulation and therefore often takes time and strong political will from governing authorities.

FIGURE 5.18 Linked to Financial Education component

20%





Yes No

Figure 16 indicates that 80 per cent of national authorities report to link their financial inclusion strategies or programs to a financial education strategy or program, which is important especially when offering products to those under the age of18.

A majority of respondents indicate that financial education is either an integrated component of the financial inclusion strategy or that financial education is integrated into the national curriculum.

80%

Source: CYFI (2015)

Conclusion on Trends  Comparing the CYFI partner data across the last 4 years, it shows that national authorities have become more responsive to questions on financial inclusion and education for children and youth. This is due to the growth of the CYFI network itself and may indicate an increase in interest on the topic of increasing access to financial services, with a particularly emphasis on those under the age of 18.  Moreover, the diversity of responses has increased over the years. Responses received are more equally divided over regions, indicating that the topic is picking up across the world.  Data additionally shows that more national authorities are integrating inclusive finance strategies and combining access to finance with financial education. As the focus on under 18s has increased, this may indicate that more children are receiving integrated services today. More data is necessary, however, to confirm this. Youth financial inclusion and economic empowerment data is still limited, partially due to the general lack of national evaluations on financial inclusion strategies  The data also shows that many programs in the CYFI network do not yet have a significant focus on services for those in the bottom age segment (under the age of 10.) More evidence is needed as to why this is the case and organizations should be further encouraged to develop materials specifically aimed at this younger age demographic.

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Chapter 6 Policy and Program Recommendations Based on the results of the surveys that have been summarized in Chapter 5, this document will now conclude with a series of recommendations for those designing programs and policies of inclusive finance for youth.

Provide Young People with a Significant Position in National Financial Inclusion Strategies, Financial Regulations and Consumer Protection Policies.

On the one hand, there needs to be a shift towards financial inclusion for children and youth and availability of bank accounts for minors. Some banks are making headway in the design of Child and Youth Friendly products, but, in general, the CYFI Banking Principles are not being adhered to on a widespread basis. Specifically, a legal guardian is often needed to use the account and this can deter young people from depositing and accessing their savings on their own terms. CYFI aims to strengthen its relationship with those financial institutions in the network to advocate for the incorporation of all CYFI Banking Principles into concrete banking products and with those national authorities that have not yet acknowledged the needs of young people in their financial inclusion strategies.

On the other hand, when financial inclusion strategies do exist, initial analysis indicates that minors are not generally a common target of regulation or policies that allow underserved populations to be financially included in an autonomous manner. Some regulations are stronger than others in allowing access to money transactions and remittances for children and adolescents, which could provide new opportunities for dealing with the financial inclusion of minors.

Moreover, in parallel, a specific focus needs to be given to the protection of young people’s rights in financial markets. So far, research indicates poor results for a specific focus on minors within consumer protection law. However, a more in depth analysis of financial regulation for youth needs to be conducted to draw this picture globally. CYFI suggests to government authorities to map this regulatory landscape and financial products to be taken into account during the formulation and/or implementation of national initiatives for financial inclusion. This will allow for the incorporation of youth financial inclusion in national policies in a more efficient way.

Link Education with Access to Finance and Target a Younger Population Despite the fact that several countries, as well as banks and civil society representatives, are starting to see the benefits and relevance of linking financial education with formal savings, a lot of work needs to be done in advancing integrated financial and educational services for young people. Wherever possible, CYFI advises stakeholders to encourage the mapping of existing policies to determine the possibilities of including a saving component in their national programs or local programs for financial education. This involves strategic coordination with financial institutions, which can provide the infrastructure to support a formal savings component to various initiatives. CYFI also encourages national authorities and youth serving organizations to explore the design of innovative alternative savings components that do not involve the inclusion of children in the formal financial system when the regulatory framework does not allow it. However, national authorities and leading civil society should enhance linkages between already existing financial products with established high quality financial education programs in order to maximize the potential of these integrated services.

Increase Youth Data Availability A lot has been said about the need to include the private sector in the development of financial inclusion and financial education initiatives. Evaluations of the state of youth inclusion, show that public and private partnerships are crucial and need to be used in order to generate and mobilize resources that can bring in additional data for assessment. The systematic evaluations of programs implemented on the national level are essential, not only to generate an objective assessment of the reach and quality of these programs, but also to reach substantial scale. In addition, in order for knowledge to be disseminated appropriately, academia and civil society need to find and utilize information sharing mechanisms and spaces on a more regular basis. As the pool of academic experts on financial inclusion, citizenship education, entrepreneurship and asset building is growing, it is essential that results are shared with practitioners and those working on the ground. Reversely, several youth serving organizations around the globe are conducting valuable research on various issues pertaining to financial inclusion and education that could provide a solid base for academic research to advance the movement towards economic citizenship for children and youth. Platforms of researchers dedicated to the issue of economic citizenship and the increase of data should be created to bridge the regional gaps in evidence and generate research that is regional specific and relevant to local policy. These platforms should be promoted and supported by relevant regional bodies and government authorities alike.

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Coordinate Efforts among A Diversity of Stakeholders, including Youth The collaboration between stakeholders in both the public and private sector can provide the pathway towards a costefficient and integrated approach to economic citizenship. Coordination of these efforts remains a challenge within the implementation of national initiatives/strategies in both financial inclusion and financial education. Even when created, platforms and working groups are often missing an agent that facilitates interaction amongst stakeholders. This agent should guide the conceptualization of complex issues, and coordinate the implementation of agreed strategies. It is essential that the aforementioned research platforms are included alongside representatives from government, civil society and the private sector.

Involve Youth in Discussions on Economic Opportunities and Access CYFI’s role is to represent the voice of youth on these platforms and encourage partners to include youth voices in their program design and implementation, incorporating young people into the process of program evaluation and policy development. Within the financial landscape for youth, it is the youngsters themselves that should help determine the measures needed to strengthen and solidify their role as financially empowered economic citizens. However, the opinions and recommendations of young people to create a better and more accessible financial future can only be materialized when children and youth are actively engaged in policy dialogue and program evaluation over the long term.

This can involve inter-sectorial awareness raising, through the Global Money Week for example.

Complement Financial Education with other Life Skills National authorities, and other program designers, should consider the integration of complementary life-skills or livelihoods content when designing financial education strategies or financial literacy curriculum frameworks. Research shows holistic educational content, consistent with the ECE learning framework, to be increasingly beneficial to children and youth through both formal and informal learning settings. Even though several national and regional initiatives have been taken to increase youth employment and increase entrepreneurship opportunities for youth, these topics are rarely addressed in conjunction with financial education and should definitely include a social and ethical considerations.

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Child & Youth Finance International Child & Youth Finance International (CYFI) leads the Child and Youth Finance Movement’s worldwide multi-sectoral network, which is dedicated to enhancing the financial capabilities of children and youth. Based in Amsterdam but working globally, we have taken on the challenge of reshaping financial systems and making sure everyone helps children and youth to become economically empowered citizens.  www.childfinanceinternational.org  ChildFinance  @ChildFinance

4 CYFI initiatives: ❶ Global Money Week (GMW) Global Money Week is a global celebration, initiated by the Child & Youth Finance Movement, with local and regional events and activities aimed at inspiring children and youth to learn about money, saving, creating livelihoods, gaining employment and becoming an entrepreneur. GMW takes place every year during the second week of March.

GMW 2015 outreach: 5.6 million children and youth via 962 organizations and over 3000 activities in 124 countries.

GMW 2014 outreach: 3 million children and youth via 490 organizations and over 2000 activities in 118 countries.

GMW 2013 outreach: 1 million children and youth via 400 organizations in 80 countries.

 www.globalmoneyweek.org  GlobalMoneyWeek  @ GlobalMoneyWeek GlobalMoneyWeek GlobalMoneyWeek  GlobalMoneyWeek

❷ Ye! for Young Entrepreneurs Ye! is an online platform for young entrepreneurs between 16 and 30 years old.

Ye! connects young entrepreneurs around the world and provides them with business knowledge, an online community, a coaching program and links to funding opportunities to help them grow their ventures.  www.yecommunity.com  Ye Community  @ye_community Interested in what a Ye! Pitching Event is like?

Checkout the video here: www.yecommunity. com/en/funding

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

 www.cyfiyouth.org  CYFIYouth  @CYFIYouth

❹ SchoolBank SchoolBank aims to create the next generation of economic citizens through quality financial, social and livelihoods education (Economic Citizenship Education) and accessible child & youth friendly banking services. The program uses innovative distribution channels and technology with the goal of financially empowering children and youth in a cost efficient and sustainable way.

SchoolBank creates the savers of the future by: • Teaching children and youth why and how to save and how to generate income • Enabling children and youth to put their knowledge into practice in the safe environment of their school • Where possible, offering innovative banking technology to children and youth Despite being in its initial phase (having started end of 2014), SchoolBank has engaged over 100 stakeholders in the project in more than 30 countries. The pilots are already being rolled out.

Here youth can get to know about CYFI Youth Meetings and Awards, the CYFI Youth Committee and internships at CYFI.

Child & Youth Finance International │ PO Box 16524 1001 │ RA Amsterdam │ the Netherlands T + 31(0)20 5203900 │  www.childfinanceinternational.org