Savings Demand Assessment Blog Series Launch: YouthSave Boosts Youth Financial Participation

A recent report dispels the myth that kids can’t save. In fact, younger youth (those under 13) save more than older youth. Parents also play an important role in youth savings. These are just two of the findings in the recently released report “Youth Savings Patterns and Performance in Colombia, Ghana, Kenya and Nepal.”

This report, published by the Center for Social Development at Washington University, a member of the YouthSave consortium, presents two-year findings on youth account uptake, savings patterns, and savings performance in the four YouthSave countries: Colombia, Ghana, Kenya, and Nepal. This study, also known as the Savings Demand Assessment (SDA), is part of a larger research agenda in YouthSave to document youth savings performance and developmental outcomes. The research is led by Washington University’s Center for Social Development in collaboration with research partners University of Los Andes in Colombia, University of Ghana’s Institute of Statistical, Social and Economic Research (ISSER), the Kenya Institute for Public Policy Research and Analysis (KIPPRA), and New ERA in Nepal.

The 66,606 account holders who are represented in the study are a subset of the 100,000 who opened accounts at participating financial institutions across the four countries between 2012 and 2014. The gender ratio of account holders in all four study countries is 44% girls and 56% boys. Additionally, an estimated 48% of youth in the study live below a consumption expenditure level of USD 2.50 per day.

One of the greatest research findings coming out of this project is the fact that, when offered the opportunity to do so, many youth will open savings accounts. Opportunity, according to our findings, is a complex matter and many factors can play a role, particularly for marginal youth. Perhaps predictably, changes in product design and outreach can affect uptake. But, also, we found that direct outreach encourages inclusion of low-income youth and females.

In terms of savings performance, youth—including low-income youth—save. Across the four countries, the average account has been open approximately 11 months. During that time, youth have saved USD 1.8 million (in PPP-adjusted terms).

These findings have implications for policy direction and financial product development. Over the next few weeks, our blog series will highlight select findings from this recent publication and explore these implications. The second blog in our series will focus on gender differences coming out of our results while our third blog in the series will discuss age and parental involvement as they affect youth savings performance.