As Good as it Gets? Getting Policy and Regulation to Work for (not against) Youth Financial Services

UNCDF, GCAP, Central of the Philippines, Child and Youth Finance International

This year, at the Global Youth Economic Opportunities Conference organized by Making Cents International, UN Capital Development Fund (UNCDF), Consultative Group to Assist the Poor (CGAP), the Central Bank of Philippines and Child and Youth Finance International (CYFI) are joining forces to share their experiences, insights, and tools for influencing and adapting policies to improve youth access to financial services. 

At UNCDF, we are first armed with field experiences of 10 financial service provider (FSP) partners from eight African countries that have researched, designed, and are pilot testing new youth-focused products.  We are now beginning to learn what works and doesn’t. We intend to take these learnings from Africa forward in a global initiative, as well as sharing them with others interested in supporting youth financial inclusion.  Because we work not only at the retail level (where we support financial services providers) and industry level (where we are sharing our learnings with industry associations in the countries where we operate), but also at the policy level, we have translated our early learnings into recommendations for policy makers, regulators, and line ministries. In our paper Policy Opportunities and Constraints to Access Youth Financial Serviceswe set forth policy recommendations to address the three primary barriers youth face in accessing financial services:  restrictions in the legal and regulatory environment, inappropriate and inaccessible products and services, and low financial capability.

CGAP is also contributing to this policy dialogue by researching, disseminating, and advising on financial inclusion for youth, e.g. the recent publication, Emerging Perspectives on Youth Savings .  CGAP has found it best to frame the youth financial inclusion conversation with regulators in a broad perspective, focusing less on actual products and age segmentation and more on life events and experiences, such as schooling and starting a family.  CGAP also recommends discussing potential financial solutions and policies in the context of common behaviors and challenges youth face.  Finally, CGAP encourages governments to learn from other countries and from field-based research, if considering new products, models, and delivery channels. 

The Central Bank of Philippines Bangko Sentral ng Pilipinas (BSP) launched the ‘Kiddie Account Programme’ in August 2011. This is the first initiative in a developing country, spearheaded by the Central Bank that permits young children to open and manage savings accounts on their own. Launched in partnership with the Bank Marketing Association of the Philippines, the programme garners the support from 12 of the top Filipino banks to enable children older than the age of seven with a school ID to open and manage savings accounts on their own. The school ID for children above the age of seven was deemed acceptable by the banks, Bangko Sentral and the Philippine Anti Money laundering Council as sufficient to open a savings account. Children can open accounts with initial deposits of 100 pesos (PHP) or lower in any of the 3000 branches operated by these banks. This programme is expected to impact the 12 million school children under the age of 12 in the Philippines, and builds on an existing financial literacy programme.

Finally while regulatory enthusiasm and flexibility are important, we must remember that we should make sure to not do harm when we intend to do good. Therefore, we’ll present a new client protection tool based on the SMART Campaign Client Protection Principles and the CYFI Youth Friendly Banking Product criteria that regulators, donors, FSPs, and others can use to assess how well youth clients are looked after. 

We invite you to learn more about our organizations and programmes by joining us at our session that will take place on Tuesday, September 11th2012 at 4pm, room 201 at the IDB conference Center.