For low-income young people in developing countries, savings can be the springboard to a better future. Recent research has shown that giving young people the tools to accumulate savings not only opens up economic opportunities, but also affects their attitudes and behaviors in positive ways. Savings can help young people fund future education or start small businesses. They can also improve young people’s self-esteem and future orientation, which may, in turn, help them make positive choices like staying in school and avoiding health risks. Such choices affect young people’s lives for years to come.
How can the potential of youth savings be maximized? A growing number of initiatives around the world are demonstrating that, contrary to conventional wisdom, even poor and vulnerable youth can accumulate savings and assets – when the right tools and institutions are available. However, many financial institutions have not developed cost-effective products and delivery systems to serve low-income youth. There is also a lack of knowledge about youth savings preferences in different markets, and about how best to educate and motivate them to save. Financial institutions – as well as the governments, donors, and NGOs that could assist them in serving this market – need better information on the development and commercial impacts of youth savings in order to increase and optimize their investment.
From 2010 through 2014, YouthSave will be working to fill these knowledge gaps and make quality savings services available to more low-income youth. Supported by The MasterCard Foundation, YouthSave investigates the potential of savings accounts as a tool for youth development and financial inclusion in developing countries, by co-creating tailored, sustainable savings products with local financial institutions and assessing their performance and development outcomes with local researchers. The project is an initiative of the YouthSave Consortium, led by Save the Children in partnership with the Center for Social Development at Washington University in St. Louis, the New America Foundation, and the Consultative Group to Assist the Poor (CGAP).
YouthSave looks forward to sharing the lessons from its work with interested stakeholders including financial institutions, NGOs, researchers, donors, and policy makers. For more information, please email firstname.lastname@example.org or explore our website, www.youthsave.org.