Youth ages 12 to 24 make up about one-quarter of the population of Sub-Saharan Africa. It is estimated that less than five percent have access to financial services. Perceptions that youth are risky clients, age restrictions on lending to them, and assumptions that products and services already ‘fit’ their needs limit the supply of youth-appropriate financial services.

Though its YouthStart programme, UNCDF is partnering with The MasterCard Foundation to help MFIs design and deliver high quality financial services for the growing youth market, and ultimately to help young people realize their full economic potential.

The mid-term evaluation of YouthStart reveals how the programme and its partners are on the right track to not only reach the initial target of 200,000 young savers by the end of 2014 but to exceed this figure. “YouthStart should reach or exceed its end of project goal by June 2014, in fact there is ample momentum for the program to reach 400,000,” stated the Evaluation report.

As of June 2013, YouthStart had reached 193,000 young people via partners ready to explore new frontiers of financial inclusion. These results were made possible by an iterative approach that allowed technical knowledge and relationships among 10 financial service providers (FSPs) to be built.

With this foundation for knowledge sharing, YouthStart was also able to produce knowledge products of interest to policymakers that represent a first step in making regulatory frameworks more youth-friendly, a key component to increasing financial inclusion of youth.

The Evaluators highlighted how since its inception in 2010, YouthStart has built a case that ”carefully- conceptualized and delivered financial education combined with accessible and appropriate financial products (mostly savings accounts) does improve financial capability and engenders economic and social positive outcome among youth.”

Delivery to girls is an area of some success for YouthStart, but also a continuing challenge.

As Rafiatu Lawal, a young woman and youth leader from Ghana, says, “For young people saving is a privilege, we face a lot of challenges with regard to financial access.” YouthStart partners still struggle to reach girls under 18. This situation is due to the greater variety and number of barriers girls under 18 face to access financial services.

These issues are typically more acute for girls than their older female counterparts or boys and young men. Despite this, some FSPs have begun to show better understanding of the challenges girls face and have begun to implement new approaches. YouthStart will continue to stimulate and monitor progress in the outreach to girls under 18.

Another area of progress for YouthStart lies in the identification of the best models to use to integrate financial and non-financial services (i.e., financial literacy, enterprise and entrepreneurship training, and life skills). Among YouthStart partners, a hybrid form of the unified model, which uses ‘ambassadors’ and existing clients or community networks to reach out to youth and to provide or facilitate some of the non-financial services, has been developed and seems to deliver better results than pure unified or linked models.

‘Unified’ services typically utilize internal human resources, while ‘linked’ involves external partnership. Early signs show the hybrid experiments yielding not only better take-up and absorption of financial and non-financial services and lessons among young people, but also greater chances for longer term institutional and financial sustainability for the FSPs.

Maria Perdomo, YouthStart Programme Manager, concludes: “We are extremely proud of our partners’ achievements. Being close to reaching and exceeding our initial target of 200,000 youth is a big milestone for all of us.

Our partners’ commitment to financial inclusion of young people has and will make a difference for these youth and the communities and countries in which they live. However, we know that the challenge is a big one as there are more than 95 million youth who live with less than US$1 a day in sub-Saharan Africa.

We need to keep up the hard work, to continue replicating what has worked so far, and learn from this evaluation to improve the programme and bring more quality financial and non-financial services to young people, in particular the most vulnerable.”

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UNCDF is the UN’s capital investment agency for the world’s 49 least developed countries. It creates new opportunities for poor people and their communities by increasing access to microfinance and investment capital. UNCDF focuses on Africa and the poorest countries of Asia, with a special commitment to countries emerging from conflict or crisis. It provides seed capital – grants and loans – and technical support to help microfinance institutions reach more poor households and small businesses, and local governments finance the capital investments – water systems, feeder roads, schools, irrigation schemes – that will improve poor peoples’ lives. UNCDF programmes help to empower women, and are designed to catalyse larger capital flows from the private sector, national governments and development partners, for maximum impact toward the Millennium Development Goals. For more information, visit https://www.uncdf.org/.

YouthStart, a UNCDF programme funded by The MasterCard Foundation, has provided access to financial services to over 193,000 youth in sub-Saharan Africa and financial literacy training to close to 200,000. For more information, visit https://www.uncdf.org/YouthStart/.

The MasterCard Foundation is an independent, global organization based in Toronto, Canada, with more than $6 billion in assets. Through collaboration with partner organizations in 49 countries, mostly in Africa, it is creating opportunities for all people to learn and prosper. The Foundation's programs promote financial inclusion and advance youth learning. Established in 2006 through the generosity of MasterCard Worldwide when it became a public company, the Foundation is separate and independent from the company. Its policies, operations, and funding decisions are determined by its own Foundation Board of Directors and President and CEO. For more information on the Foundation, please visit www.mastercardfdn.org.