“Bringing the Bank to the Unbanked, While Making Bank” Blog Series to Launch This Month

For the past four years YouthSave has worked with partner financial institutions in Colombia, Ghana, Kenya and Nepal to extended tailored savings products to in- and out-of-school youth in urban and rural areas. To facilitate access to savings products, we have leveraged a variety of innovative models – such as cash collectors, mobile banking, and POS (point of sale) agents. As of today, over 19,000 young people have opened YouthSave savings accounts, effectively putting themselves on a path toward a future in which they may lay claim to assets and tap into the security that comes with a formal financial footprint.

There are some hard facts that have laid the foundation for YouthSave’s work thus far: Half of the world is unbanked. There are 2.5 billion adults worldwide lacking access to formal financial services, and almost all of them are low-income. The majority are women. Furthermore, despite the large population of young people living in the developing world, financial institutions often overlook youth when they develop financial products. Financial exclusion perpetuates poverty, while youth financial inclusion is an effective tool in in poverty reduction efforts. However, financial inclusion of youth is a difficult task. The YouthSave project has faced country-level challenges including obstacles related to policy and regulatory environments and lack of country-specific knowledge about the types of products that meet the needs of poor youth.

YouthSave has undertaken these challenges, having learned and shared much insight along the way through Youthsave.org. One such insight is the key role that the private sector can play in extending financial access to the financially excluded. Meeting the financial service needs of half the world can only occur with all hands on deck. So in addition to regulators, policy-makers, banks and public-private partnerships such as YouthSave, private actors are vital in the movement toward financial inclusion particularly in developing countries. Over the next few weeks we will take a look at the creative ways in which non-bank businesses are bringing the bank to the unbanked, while making bank! (Try saying that 10x fast!)

The “Bringing the Bank to the Unbanked, While Making Bank” blog series will spotlight private companies that are creatively extending financial services to individuals and even merchants who might otherwise not have access. Despite the fact that financial inclusion is not a part of these businesses’ mission statements, broad inclusion seems to make good business sense. YouthSave bloggers have touched on the business case for youth savings. The upcoming series will explore how some private sector enterprises in Kenya are arriving at the conclusion that enabling broad financial inclusion can be a winning proposition. The series will focus on companies such as Shop Soko and Kopo Kopo Inc. which are generating profits while embedding a theme of financial inclusion within their unique business models. There are several questions that will be explored: Why have so many of such enterprises been able to flourish in the East African nation? What demands are being supplied? How does this all tie into the concept of a "cashless" economy? And of course, what part is the famed M-Pesa playing in Kenya’s rapid-fire ride toward financial inclusion for all of its citizens?

In the coming weeks, we invite you to tune-in via youthsave.org or follow #youthsave on Twitter for:

Excerpts from interviews with the entrepreneurs behind these innovative business models Unanticipated factors driving financial inclusion forward in Kenya A creative illustration of how financial inclusion has contributed to a positive bottom line for several growing companies

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