Youth Savings Performance in Ghana, Kenya, and Nepal: Results from Pilot

Are YouthSave accounts attracting low-income youth? Are youth making deposits into their YouthSave accounts? Are there adjustments that would help youth to save more? These are questions we’re beginning to answer in YouthSave using data from the savings demand assessment in Ghana, Kenya, and Nepal. The savings demand assessment, part of YouthSave’s multi-method research agenda, allows researchers to track youth and household demographics and account transactions over the life of the YouthSave project. The findings tell us something about who saves, how much they save, and what characteristics are associated with saving.

Beginning in summer and fall of 2011, HFC Bank (Ghana), Postbank (Kenya), and Bank of Kathmandu (Nepal), piloted their YouthSave products. (BCS in Colombia did not conduct a pilot.) Demographic and savings data from youth accounts were gathered between July and December 31, 2011 (piloting start dates and number of branches participating varied across country). The preliminary results reported here are based on responses from 306 youth in Ghana, 384 youth in Kenya, and 310 youth in Nepal.

Are YouthSave Accounts Attracting the Target Population?

YouthSave targets low-income youth, ages 12 to 18, both in school and out of school. Demographic information from the pilot period suggests that YouthSave products reached youth in the target age range (the average age of account openers was 14.92 in Ghana, 14.31 in Kenya, and 13.18 in Nepal). In addition, the savings products reached youth in the target income range; the majority of YouthSave account openers were in the lower three income categories (53% in Ghana, 72% in Kenya, and 82% in Nepal). The YouthSave financial products were less successful in reaching out-of-school youth, which is in part due to the concentration of marketing conducted in and around schools for the pilot phase. Between 96% and 99% of account-openers were enrolled in school.

A particularly exciting finding is that the majority of youth (90%-96%) who participated in the pilots had no prior banking experience, suggesting that YouthSave is reaching a previously unbanked population. Another striking finding is that far more youth in each country reported that they were saving for their own education than for any other purpose: 82% in Nepal, 73% in Ghana, and 54% in Kenya. It is unclear if youth interpreted saving for their own education as putting aside money for immediate education-related costs such as school fees, or as a means to help fund longer-term education costs. The latter would suggest that youth are thinking of these accounts as opportunities to build assets to support their long-term development.

Are Youth Saving in their YouthSave Accounts?

Data from the pilot indicate that youth are making deposits into their accounts, albeit at low levels, and on the whole, depositing much more than they withdraw. In PPP-converted US dollars, youth had total net savings for the pilot period of $11,327 in Ghana, $7,420 in Kenya, and $1,901 in Nepal. Ghana’s longer pilot period—accounts in Ghana were open approximately twice as long as those in Kenya and Nepal—may explain the higher amount of net savings among youth in that country.

In US dollars, average monthly net savings per account were $10.81 in Ghana, $10.89 in Kenya, and $3.29 in Nepal. Given the brevity of time and limited number of branches participating during the pilot period, interpretation based on these numbers would be unwarranted. Over time, however, research in YouthSave will be able to assess characteristics associated with savings outcomes.

Next Steps

As the YouthSave products are launched in Colombia, Ghana, Kenya, and Nepal, YouthSave research will collect demographic information on new accounts and track account take-up and savings. This data will serve as the basis for comprehensive analysis of savings patterns by youth and household demographics, and assess effects of financial workshops on savings performance.

Over the next few years, savings data will also be linked to experiments within YouthSave. Using these data, researchers will be able to measure the effects of in-school banking on savings performance, and the effects of savings on academic achievement and health behaviors.