“When my business is busy, my money goes on buying sewing materials and family support, this leaves me with little or no cash for emergencies, or to pay school fees for my children” Alice Toukuru, a seamstress from Solomon Islands, explained. She’s a customer of youSave, a micropension product developed by the Solomon Islands National Provident Fund (SINPF) with support of the Pacific Financial Inclusion Programme (PFIP) and has been using the product to better manage her cash flow and prepare for the future; “Now I withdraw from my youSave General Savings accounts for these emergencies and when the school fees are due for payment. youSave has helped me to prepare for the unexpected.”

Alice Toukuru sewing clothes, which she sells at the Honiara Central Market

Like Alice, 75% of Solomon Islanders are informal sector workers. These informal sector workers are largely underserved when it comes to savings products and far less likely to have a pension than formal sector workers. One cause of this is the lack of products and associated services and support that are designed to suit their needs. Due to their irregular income informal sector workers need to be able to make deposits when and where it is most convenient for them. As Alice’s experience shows they may also need to make withdrawals, which isn’t always possible with traditional pension schemes. Before joining youSave Alice was a savings account with one of the commercial banks to save, but was frustrated by her experience. It incurred penalties and fees, didn’t offer interest on her savings, and she found that because withdrawals were easy to make, she had difficulty saving in the long-term. She then kept her savings at home, but found it even more difficult to her protect her money from every day expenses when they were so easily accessible.
Experiences like Alice’s informed the design of youSave. SINPF wanted to offer an affordable pension savings product that could be used for customer’s short-term unexpected financial needs while providing a safety-net for their future. For every Solomon Islands dollar saved into a youSave account 50% is deposited into a preserved account, which cannot be accessed until the account holder is 55, and the other 50% is deposited into a general account, which allows for up to four withdrawals each year.
The ability to withdraw money for emergencies has been a huge help to Alice as the Solomon Islands economy slowed down due to COVID-19 and she found herself without work. When customers, like Alice apply to withdraw from their general account, they are required to give a reason on the form. School fees and covering a shortfall between income and outgoing household expenses are the two most commonly cited reasons.

As a single father of four Phillip Kili used to often find that his salary as a security guard didn’t stretch far enough and just like Alice, he previously used a commercial bank account to save, but found the charges too high and his money too easily accessible. Since being introduced to SINPF in 2019 Philip has been able to save more regularly while withdrawing less frequently. “I prefer the idea of limiting the number of times I can withdraw my money, I now only withdraw if I really need it.” Philip has been able to save money for his childrens’ school fees and make contributions towards a relative’s funeral expenses and contributed to another relative’s bride price. While Philip may not fit the profile of the customers that SINPF created youSave to serve, as he is formally employed, his usage of the youSave account shows how useful the structure of the product has proven to be for many people.

Mr. Phillip Kili preparing for his morning shift working as a security officer for Solomon Security Services Ltd.

Key factors that attract customers to youSave include the light KYC requirements, zero fees for account maintenance and more importantly the recently introduced option to use mobile phone airtime credit to deposit instalments into the account. youSave was designed together with the people it was intended to serve and it’s resulting appeal is clear from the fact that as of as of January 2020, there were 17,305 youSave members. Women make up 56% of the membership despite UNCDF research showing just how hard it is to reach women customers in Solomon Islands. As Alice and Philip’s stories show, it is youSave’s ability to help people cover their short-term financial needs, while at the same time preparing for the future that is valued by customers.