How can young people from low-income countries get the best from financial services?
With goals that range from “[being] financially stable”, to “being an established business tycoon”, young people from low-income communities have big ambitions. However, due to an interwoven mix of financial barriers, they currently lack the information, infrastructure, and knowledge to pursue such ambitions. How can organisations put young people from low-income communities at the heart of financial inclusion decision-making, in order to help them achieve their ambitions?
The Futuremakers Forum 2022, held in July this year, sought to answer this question by exploring ways to lift youth participation through financial inclusion. Framed through a joint research effort involving Anna Barford from Cambridge University; Business Fights Poverty’s own Stephanie Shankland and Katie Hyson; and Standard Chartered Bank’s Victoria Jory, Neil Fleming, Natasha Kwakwa, and their teams from across the bank, the research involved 1,270 18-35-year-olds from 21 countries alongside 37 stakeholders. The research shaped the two-day Forum, which in turn brought together over 1,700 people from 61 countries. The eight Forum sessions heard from a diverse group of voices – with over 70% of speakers being women and 54% from the Global South. The Forum created the space for young people to share their experiences, build bridges between such experiences and financial experts, and rethink how financial products and services can empower young people to learn, earn, grow and achieve.
This article delves into the current gaps, insights, and recommendations that were revealed from the Futuremakers 2022 research and Forum – for financial services providers, businesses, and society as a whole.
Current gaps in financial products and services for young people
The young people we surveyed have access to, and use, some financial services and products — for example, more than half (51%) of young people surveyed have a bank account, 44% use mobile money, and 43% use electronic payments. However, they prefer not to use such services as they do not meet their needs. Banks, young people commented, are “credible,” “trustworthy,” “safe” and help them be “less wasteful” with their money, but are also too costly, are often too far away and too complicated. 62% of young people said they don’t know enough about financial products and services for personal use; 75% of young business bank users said they assumed they would not be eligible for products and services on offer, and only 9% of young people said they turn to a bank when they need financial and non-financial support.
Women specifically face the ‘double-strike’ of being young and female, suffering added restrictive legal and cultural practices. Yet, when asked, “how do you feel about accessing and receiving financial services?,” women entrepreneurs in our survey overall said they felt “confident” and “well-informed” about their own ability to access financial products and services, suggesting that, in unequal structures, even women who feel financially confident are still self-selecting out of the market.
Key insights on including young people in decision making
While gaps exist, so do opportunities. Five key insights gained from the Forum have helped us all to better put young people at the heart of decision making.
- Young voices throughout the Forum stressed the need for inclusivity, highlighting that not only should the youth population be engaged but special effort should be made to include those with disabilities, diverse experiences and cultures, young women and with differing work and educational experiences to name just a few.
- Financial health: young people talked about the feelings of uncertainty and worry felt by those who had not built up a good financial base.
- The importance of financial learning, as explained by a young Futuremakers Participant, Rafiq Kamal, who said “finance should be as easy and fun as any other part of our life.”
- Through mentoring, decision-makers within financial organisations can learn from young people, and in reverse, young people can learn from financial service professionals.
- And finally, innovating with young people at the heart of decision-making is pivotal, as captured by Brynn Kolada, Senior Partnerships Lead of IDEO.org, who said: “If we can shift from a mindset of:‘How can we empower young women to access traditional financial products?’, toward more of a mindset of:‘How can we create more creative funding mechanisms that work for young women and work for our users?’, I think we’ll get a lot further.”
Solutions and recommendations
Young people should be at the heart of designing financial products and services fit for them, according to specific cultural and regulatory contexts. A peri-urban, self-employed young woman in Ghana is quoted in the research, calling for financial companies to : “Be open to us—the individuals […] don’t just focus on selling your products to us, but be concerned about our financial goals and assist us where necessary to achieve them.” A relationship needs to be built between formal financial services providers and young people—particularly in low-income and low-trust settings. Financial services providers can give young people, through new digital tools, styles, and approaches, access to the information they need to be able to make informed financial decisions, beyond what traditional financial education already provides.
Youth empowerment and inclusion should not be consider a question of whether or not banks can reach young people, but rather a collective challenge to lifting young people’s participation in economic markets, helping them on the path to achieving their goals, and improving their own lives and those of their communities. As a collective responsibility, every business and organisation has a role to play. Pheodor Njoroge, Senior Global Sustainability Manager, Functions & Business Innovation indicated Unilever’s commitment to addressing the financial gender gap by “creating income opportunities, providing skills, training, and empowering women in the retail value chain to grow their own business.”
The research we conducted and the discussions during the Futuremakers Forum demonstrate the power of putting young people at the heart of decision-making. As the Forum wrapped up, 99% of participants expressed that they learnt something useful that they could apply to their own work and life context, with one participant describing the Forum as a “life-changing opportunity”. Whilst another shared: “It was a fantastic event and I hope to see more like this. Thank you to Business Fights Poverty and Standard Chartered for creating this platform for conversation and learning. It exceeded all expectations, I couldn’t switch off! Rare for an online event :-)”
In conclusion, and in the words of Claire Dixon, Group Head, Corporate Affairs, Brand and Marketing at Standard Chartered Bank, “everyone deserves a chance to reach their full potential, no matter how they start in life. Through education, empowerment, and inclusion, we will take a stand and lift participation.”
Futuremakers Forum 2022, hosted by Business Fights Poverty. Forum main site, recordings and other learning resources: https://businessfightspoverty.org/futuremakers-forum-2022-resources/
Standard Chartered Bank. Futuremakers and Empowering the next generation: https://www.sc.com/en/sustainability/investing-in-communities/futuremakers/