Saving for the Future: Youth Savings

Women's World Banking

The total global population of girls ages 10 to 24 is expected to peak in the next decade. According to market research conducted by WWB, girls as young as 10 years old regularly accumulate money, actively manage it and want a safe place to save it.

Ana Laura lives in a low-income neighborhood in Santo Domingo in the Dominican Republic. She opened her first “Mía” savings account at Banco ADOPEM in April 2011. She closely monitors the money she has in her account, keeping track of the number and size of deposits she makes.

Ana Laura is only 13.

Ana Laura opened her first "Mia" savings account at Banco ADOPEM, Dominican Republic, at 13 years of age.

Not your typical bank client

Financial institutions are traditionally oriented towards adults as customers and often do not see youth as a viable target market. However, as young people become a larger part of the world’s population, they represent the future for financial institutions, especially in developing markets. Youth can be thought of as the next generation for financial institutions, both in terms of actual future clients and institutional growth.

A path to economic empowerment

More importantly, providing financial services for young people can give them a head start in having secure economic futures. The value of a savings account goes beyond the amount actually saved  because in the process, youth learn how to navigate the formal financial system, such as becoming aware of  alternative ways of obtaining money in an emergency, i.e. withdrawing from their savings account as opposed to borrowing.

The positive impact of youth savings is especially apparent for girls. Research suggests that by serving a girl at the vulnerable crossroads of adolescence, she can be empowered to be a catalyst for change in her family and community. Women’s World Banking is focusing on targeting girls because early evaluation of girls’ savings projects suggests that increased savings is associated with positive outcomes including higher educational aspirations and attainment. Investing in girls’ education creates a ripple effect: an extra year of primary school boosts her eventual wages 10 to 20 percent, she marries later, and she has fewer children.

Building a community to serve youth

WWB hosted 12 financial institutions in Sri Lanka earlier this year to expand access to youth savings programs during its first international “Innovations in Youth Savings” workshop. The workshop highlighted existing youth savings programs at network member and partner financial institutions while providing an opportunity for participants to learn from their peers. WWB also developed a toolkit, “Banking on Youth: A Guide to Developing Innovative Youth Savings Programs,” to help more MFIs to develop or refine youth savings programs, which also contributes to WWB’s goal of scaling youth savings programs based on successful beta sites. The toolkit guides practitioners as they build the business case around youth savings and then through the decision points and implementation process of a youth savings program.

What’s Next?

Ana Laura has already made two deposits to her account and is still thinking about her dreams of going to university. And as Esperanza, a 14-year-old Mía account holder put it, “having a dream is important for saving–you can’t reach your dreams without money, and to have money you need to save.” Women’s World Banking looks forward to a world where all young people have a chance to save for their future, and their community’s future.