What happened during the CGAP-Silatech Youth MENA Financial Inclusion Workshop in Morocco?
For more than a generation, the MENA region has had the highest youth unemployment rates in the world, at 25%, reflecting decades of youth economic and financial exclusion. An analysis of the Global Findex found that only 13% of people aged 15-24 in the MENA region had accounts at a formal financial institution, as compared to a world average of 37%, and to 17% in the next closest region, Sub-Saharan Africa. After decades of social, economic, and political marginalization, young people have been at the forefront of the social unrest taking place across the region over the past two years. The Arab Spring was sparked by the actions of a frustrated young Tunisian street vendor, a micro-entrepreneur. Governments have responded by searching for innovative policy interventions to support youth economic and financial inclusion. In light of the demographic reality of 88 million young people, representing one third of the working age population, youth economic and social empowerment is seen as key to political stability and economic prosperity.
In response, CGAP and Silatech jointly organized a workshop on “Youth Financial Inclusion in the MENA region” to present evidence on youth financial inclusion in MENA and globally. The main objectives were to: (1) increase awareness on the state of youth access to financial services in the MENA region; (2) facilitate an exchange of knowledge, including lessons learned and innovative ideas; (3) identify potential areas for future collaboration, including policy engagement; and
(4) explore the establishment of platforms to follow up on the workshop’s outcomes, develop actionable agendas, and inform program design and public policy.
In his keynote speech, Mr. Loic Chiquier, FPD MENA Director at the World Bank, stated the theme is of timely importance to advance the broader agenda of economic and social participation in the region. He presented four areas of reform: (i) product offering (to include savings, insurance, housing loans, and Islamic finance); (ii) legal and regulatory environment; (iii) market infrastructure; and
(iv) consumer protection and financial literacy. He also pointed that the capacity to bring together disparate efforts into a coordinated sum is a key success factor of financial inclusion strategies.
- Session 1 featured the state of youth financial inclusion within the broader development agenda of economic empowerment. Making Cents notably highlighted the sense of urgency as the window of opportunity created by the youth ‘bulge’ will soon be closing. Benefits of youth financial services include: (i) asset building, (ii) positive habits (e.g. long term planning), (iii) self-esteem (e.g. contributing to the household), and (iv) employment facilitation.
- Session 2 presented examples of youth financial services programming from the region, featuring Enda’s start-up product (Tunisia), ABA’s experience in both financial and non-financial service offering (Egypt), Al Barid Bank’s mission to improve financial inclusion (Morocco), and Al Amal Bank’s youth-targeted lending and deposit services (Yemen). Key challenges included: high operating costs, identifying youth with entrepreneurial spirit, the need for non-financial services, and the lack of enabling environment. Due to the constraints of collecting savings and to unemployment being a key issue in the MENA region, the focus was on entrepreneurship and start-up capital.
- Session 3 looked at the confluence between technology, financial access and youth, focusing on innovation on the funding side and in delivery channels. It featured Kiva’s Arab Youth products, Tunisiana’s MobiFlouss pre-paid service and its mobile platform for financial literacy and labor market opportunities, Visa’s financial inclusion strategy for the MENA region (pre-paid rechargeable cards), and Kaah Express money transfer services in Somalia.
- Session 4 presented donor strategies related to youth and financial services. It included USAID’ youth policy, aimed at realizing the benefits of the youth dividend and UNCDF’s YouthStart program that opened 150,000 youth accounts, touching on policy constraints and on the difficulty to provide youth financial services on a sustainable basis. CGAP’s study on key evidence showed that although impact varies by product or service, it is consistently higher for youth as compared to other segments. It also showed that it is easier to change knowledge of than to actually impact labor market activities.
- Session 5 discussed barriers to creating an enabling environment for increased youth financial inclusion in the MENA region, featuring CGAP, the Moroccan Ministry of Youth and Sports, Jaida (Morocco), the Egyptian Banking Institute (Egypt), and Attawfiq Microfinance (Morocco). Opinions diverged as to the importance of Youth Financial Inclusion as a stand-alone policy objective, as opposed to broader Youth or Financial Inclusion agendas. Governments in the MENA region are recognizing financial inclusion as an issue, but regulation remains a key bottleneck, especially for youth savings and mobile money services.
- Session 6 looked to recap the big themes emerging from the event and identified several areas of work ahead, most notably: (1) data collection and standardization; (2) gaining a better understanding of financial inclusion and relation to employment, start-ups, and asset building; and (3) policy advocacy.
Particularly acute in the MENA region, youth issues are also attracting global attention. The United Nations newly appointed Envoy on Youth, Mr. Alhendawi, stated that “the process of establishing a post-2015 development agenda must include youth input and participation to reflect the issues that concern them”.
Stay tuned on Youth Economic Opportunities as we take those discussions forward!
You can find speaker bios, participant lists, and more, here: