6.7.2 Amplify Financial Services that are Working in Rural Areas

At this point in the development of rural YFS, there are models of financial access that are working that are ready to be expanded to reach scale. These models are reaching significant numbers of people, are producing lessons learned, and are advancing by developing variations customized to diverse populations and situations. For some, sustainability remains a key challenge, but others are demonstrating the same levels of sustainability as equivalent services targeted to adults. There are models ready for amplification in broad service categories, including:

  • Financial literacy and education, integrated into school curricula or other financial services
  • Savings Groups, including groups that offer loans
  • Mobile money transfer services
Youth Savings and Loan Groups

Plan International’s youth savings groups include 81,000 members, reached over a period of 3.5 years. The member retention rate is 97 percent and only 1.1 percent of loans are past due. Savers receive an average annual return of 23.5 percent. Critical success factors include:

  • Strong youth participation in design, outreach, training technical assistance and monitoring evolving into youth leadership roles
  • Involve parents and adults in the community
  • Savings groups as the lead service, with other services that develop knowledge and skills and sustain interest
  • Avoid training centers, leverage village and neighborhood affinities
  • Logically integrate services, don’t just “mix” them
  • Engage, train, coach and compensate community youth volunteers

Although Plan does not specifically track rural youth engagement or performance, a significant portion of savings groups are rural. Anecdotally, staff suggest some lessons about rural youth savings groups:

  • SGs are even more appropriate in rural areas where there are fewer formal financial institutions
  • Stronger rural affinities lead to stronger groups
  • Higher reluctance to borrow means lower returns to savers, probably linked to fewer economic opportunities
  • Limited economic opportunities may lead to higher outmigration

To address the need for better economic opportunities, Plan International engages in parallel activities to help young people identify and gain skills in agriculture and other enterprises.