This year’s theme for International Youth Day, ’The Road to 2030: Eradicating Poverty and Achieving Sustainable Production and Consumption’, is a reminder of how vital youths’ access to economic opportunities is to helping attain the Sustainable Development Goals. 

With an estimated 3 billion people in the world under the age of 25, approximately 1.2 billion are between the ages of 15 and 24, which accounts for 17 percent of the global population. Although this vibrant group has much to offer the world in terms of innovation, labor and enthusiasm, they are disproportionately affected by high unemployment rates and represent 40 percent of the world’s unemployed.

Youth face unique challenges as they navigate school-to-work pathways and their first job, including: costly family health emergencies and school fees, decisions to engage in risky behaviors, and a lack of knowledge about labor market opportunities. Approaches to reduce the severity of these challenges require long lead times inter alia related to enabling environments and resources.  There is an urgent need for a sustainable model to build youth resilience, in particular for young women, to successfully navigate school-to-work transitions, while adopting a capabilities approach to broaden youth employment opportunities. These approaches need to enhance youth engagement with their local economies and support their access to opportunities within their immediate financial ecosystem. Key capabilities and factors that support transitions include financial capability and other social services that support youth financial inclusion and more broadly, youth economic empowerment.

Improved financial capability and access to other social support services have the potential to integrate youth as drivers of innovative economic growth and job creation, hence smoothening school to work transitions as they engage in less risky behaviors.  However, youth face a complex mix of barriers to economic inclusion such as lack of education programmes that match their needs, negative attitudes from financial service providers (FSPs), and the lack of a conducive ecosystem that enables youth to flourish. These barriers are systematically embedded within systems of regulation and cultural norms. Addressing these barriers requires a new approach to alter the roles and relationships of key actors to increase youth economic opportunities.

Through its YouthStart Programme, UNCDF has witnessed youths’ capacities for being productive, viable customers for financial services providers.  YouthStart has worked in eight Least Developed Countries (LDCs) in Africa to help financial service providers develop business models that offer affordable, relevant and accessible financial products coupled with complementary non-financial services for youth ages 12 – 24. To date, over 665,000 youth (49% young women) have accessed such financial and nonfinancial services. Young people in the programme saved over US$18 million, and over 89,000 young entrepreneurs accessed US$11 million for an individual or a group loan to start up or expand their own businesses. Eighty percent (80%) of young people stated that access to these services had positively influenced their situations/lives.

By accessing financial services coupled with relevant training, youth are not only becoming better equipped to make more informed financial decisions but also building financial, social, and human assets for their futures. The high demand for financial services by youth - as witnessed through the YouthStart program - illustrates first hand youths’ ability to effectively manage their finance; their desire for decent employment in order to be contributors in the development of their countries; and underscores their aspirations to stay rooted in the economic life of their communities if the opportunities are there.

On this International Youth Day, UNCDF pledges to continue its efforts to support youth in their quest for economic inclusion. We endeavor to increase our efforts to ensure youth have improved financial capability and access to social support services which have the potential to integrate youth as drivers of innovative growth and job creation while helping secure their economic futures.