DRIVERS OF YOUTH FINANCIAL INCLUSION: FRAMEWORK FOR ANALYSIS

The following five main drivers are generally considered as key to driving financial inclusion of youth in Africa.

These drivers have been modified from the 4Es framework and can be applied in a pre-crisis, crisis or post-crisis context. These include the following:

1. Enabling environment

2. Education

3. Employment

4. Entrepreneurship

5. Engagement

Data Collection

Critical for understanding the depth and breadth of financial access and use by young people at the country level, as well as the types of barriers young people face.

National Strategies

Integrating the needs and constraints of youth within national financial inclusion and financial education strategies, while also addressing youth financial inclusion within broader youth development policies

Regulatory Reforms

Regulatory reforms and/or new regulations that promote financial inclusion among young people while also protecting the financial sector against financial risk.

Public Policies And Nonregulatory Interventions

Non-regulatory interventions, including public-private partnerships to build financial capability, support youth in general and young entrepreneurs in particular, and facilitate capacity building for financial institutions in the design of products and services for youth.

Enabling Environment

The AFI’s Youth Policy Framework presents 4 pillars that policy makers and financial regulators should consider for promoting an enabling environment for youth inclusion: data collection, national strategies, regulatory reforms and public policies and nonregulatory reforms.

UNCDF adopted this market systems development approach during its YouthStart Program for providing financial and non-financial services to youth (see figure 3). This approach shows the interplay and coordination of actors and policies at the macro, meso and micro levels. A national financial education strategy (NFES)4 is an important policy at the macro level along with other youth-friendly regulations and policies that promote the uptake and usage of traditional and digital financial services including sex- and age-disaggregated data, flexible KYC, client protection and minimum age requirements to open an account. A key component at the meso level is partnerships, coordination and interoperability among financial services providers (FSPs), FinTechs and youth serving organizations (YSOs). Another component at the meso level is information about the youth and for the youth – to improve information asymmetries between youth and FSPs/ FinTechs. At the micro level, key stakeholders are youth (demand) and financial institutions and financial education providers (supply).

National Financial Education Strategies Toolkit

> View here

Table 1 presents a timeline of the enabling environment initiatives and policies for youth financial inclusion taking into account that youth financial inclusion is impacted by youth education, employment, entrepreneurship and engagement.