4.3.7 Address KYC Early with Regulators

Know Your Client (KYC) regulations have become increasingly important in recent years and are used to prevent identify theft, financial fraud, money laundering and terrorist financing. The Council and its partner financial institutions K-Rep and Faulu in Kenya launched the girls saving program without stringent KYC requirements. At rollout however, both partner banks decided to tighten their rules, based on Central Bank requirements, and as a result, the girls without parents and formal guardianship papers were not able to open accounts due to parental signatory requirements. To resolve this, the Council and its partner banks tried to obtain a waiver from the central bank, and in its absence, worked to find a compromise in which account opening requirements were eased while the banks still felt that they were mitigating risk. 

However, even still, many of the girls were unable to open accounts under the new requirements.  Therefore, when the Council began work in Zambia, they raised the KYC issue at the first meeting with partner bank, the National Savings and Credit Bank (NatSave), who then went to the Central Bank of Zambia to request a waiver.  As a result, girl-friendly KYC processes were established prior to the pilot of the savings account even beginning.

The Council and WWB continue to learn in their replication activities. Additional insights into WWB’s youth savings model include automatic roll-overs to the next level of savings to encourage loyalty and long-term sustainability as youth age out; and cross-selling to parents, which encourages parental buy-in for youth savings and at the same time captures parents as bank clients eligible for loans and other financial products. WWB is also looking at alternative delivery channels including mobile phones, Points of Service (POS) and ATMs to reduce any barriers to access to financial services and further promote account activity. The Council’s ongoing research will look at answering questions related to sustainability of their asset-building model, ensuring that partners will continue the girls’ savings program once donor funds end.  It will also begin a new study that will further explore the relationship between economic assets, namely savings, and sexual exploitation.