8.5 Some YFS Models are Beginning to Show Real Evidence behind How and Why They Work

One of the challenges faced by the nascent youth-inclusive financial services sector is the question of whether or not integrated YFS models (combining access to financial products with financial education and other nonfinancial services) are having the desired impact on clients. Rare is the opportunity that an institution has the funding to carry out impact analysis on its clients. However donors including the Nike Foundation and The MasterCard Foundation have demonstrated strong commitments to doing so. This year, a few of their partners presented promising findings in terms of the impact that some YFS models can have on both the financial and social health of young people.

The Population Council, an international nonprofit organization that conducts research in biomedical, social science, and public health, recently conducted an evaluation of its Safe Spaces, Financial Education and Savings for Vulnerable Adolescent Girls (10-19) program in Kenya and Uganda.1 This project tested two different approaches to girls’ savings: one involving a group setting with training and other non-financial services and the other, a savings-only model. Each received formal savings delivered by K-Rep Bank and Faulu in Kenya and FINCA Uganda and Finance Trust in Uganda. Microfinance Opportunities (MFO) evaluated Women’s World Banking’s Savings and Financial Education for Girls (14-17) program at XacBank in Mongolia, testing whether there were any differences in outcomes among girls who opened savings accounts, girls who opened savings accounts and took financial education courses, and girls who did neither.2 MEDA, in its YouthInvest program, surveyed 260 Moroccan youth (15-24) participating in a financial education training program that links participants to formal savings accounts.3 Each program took a different approach to designing the financial education and other non-financial services. The evaluations themselves focus specifically on the impact of the combined services (financial combined with non-financial services) rather than the actual content of the different training or other non-financial services.

Some key research findings include:

  • Participation in savings, with complementary non-financial services, may have a positive effect on:
    • Whether or not young people save: Under the YouthInvest program, MEDA is attempting to reach 50,000 youth between the ages of 15 and 24 with access to formal savings accounts and complementary non-financial services, including training and internships.4 Through baseline (June 2010) and follow-up focus group discussions with pilot test participants, MEDA saw an uptake in savings. Nineteen percent of participants indicated that they participated in savings activities, either formal or informal, before participation in the YouthInvest program, while 96 percent reported savings seven months later (January 2011). In a follow-on study six months later (June 2011), MEDA found that 94 percent of respondents continued to use their savings account. Similarly, Population Council’s data found that participants in savings programs through FINCA Uganda and Finance Trust in Uganda were 4.2 and 4.7 times more likely, respectively, to save than the comparison group, who did not report an increase in savings.
    • Young people’s savings habits: MFO found that those adolescent girls participating in XacBank’s savings program tended to develop more strategic methods of saving by the end of the program, as compared to relying on a less formal approach as seen prior to entry. One young client reported, “The account reduced the amount I usually spend because the money is not as accessible. Before, I saved at home, but I tended to take the money and spend it. If I receive a gift, I save half in my account.”5 Population Council also found that girls in the program were 1.5 times more likely to have a savings plan and a budget than the comparison group. Moreover, those who participated in the program were more likely to have been in a bank and to have used a bank services in the past six months than those in the comparison group.
    • The use of formal savings mechanisms: During its baseline study, Population Council measured that only five percent of FINCA Uganda participants and 12 percent of Finance Trust participants were using a mix of formal and informal mechanisms for savings. However, upon participation in the program, 78 percent of FINCA Uganda participants and 79 percent of Finance Trust participants were doing so. After one year, there was no change in the comparison group’s use of savings mechanisms with 88 percent using informal methods only.
    • The amount that young people save: MEDA reports that its average youth participant’s savings account grew by 64 percent, on average, between the start of the YouthInvest program and the follow-up study that was conducted seven months later. Population Council’s data showed that, on average, the girls who participated in the study save more than those in the comparison group. For FINCA Uganda participants who saved at baseline, the average amount saved increased from US$6.50 to US$16.28, while that for Finance Trust participants who were already saving at baseline increased from US$11.91 to US$25.54. MFO also found that those adolescent girls who had a savings account at XacBank and who also participated in the complementary financial education saved more on average than girls who only received a savings account or those in the comparison group.

8.5.1 Bright Ideas: An Integrated YFS Model That Works for Vulnerable Adolescent Girls in Africa

The Population Council has worked for many years on health issues related to adolescent girls. Through this work, experts came to the realization that despite being well educated on pregnancy and HIV, girls in poor economic conditions are still unable to make healthy sexual behavior decisions. After studying different microfinance models, Population Council learned that girls valued savings over credit and that they placed an even higher value on the social interaction they received through a group setting. In response, experts developed a model that aimed to address both the economic and health needs of girls. It developed a three-pronged approach with a goal of increasing social (building trust with peer and mentors), human (life-skills), and economic (savings) assets. The model, Safe Spaces, Financial Education and Savings for Vulnerable Adolescent Girls program, was piloted in 2008 and 2009 with support from the Nike Foundation.

The Safe Spaces model groups girls ages 10-14 and 15- 19 into groups of 20 to 25 participants. Each girl opens a savings account at partner banks, K-Rep Bank and Faulu in Kenya and FINCA Uganda and Finance Trust in Uganda. They meet weekly in a safe space identified

by the financial institution, often through partnerships with community based organizations. Each girl selects a financial mentor from her community over the age of 18 who legally appears on the account due to regulatory requirements. A separate group mentor, and role model, delivers financial education and basic health training during group meetings. The program also has quarterly parents meetings to ensure parents are aware and approve of their daughter’s group activities.

After three years the program is now reaching over 3,500 girls in Kenya and 4900 girls in Uganda (as of the end of 2011). The data presented in this section that this type of integrated approach can have a significant impact on girls’ self-esteem, health, and financial situations. Because of the success of the project, Population Council will embark on a follow-on project in 2012 in Zambia with support from the UK Department for International Development (DFID).6




  • Participation in a savings group may have a positive impact for banks.

Population Council found that those clients who had a savings account but who did not participate in a savings group made nearly two times as many withdrawals as those who did participate in groups (3 versus 1.7 withdrawals). These clients withdrew smaller amounts, on average, and did so more frequently, which increases operating costs for the bank.

A FSP’s ability to cross-sell to its youth clients and their friends and family is often one of the most important reasons to invest in YFS. The same study showed that those clients who participated in a group were more likely to say that they would open another account with the same financial institution than those savers who did not participate in the group savings. In a separate but related finding, Population Council found that 13 percent of the girls who participated in the program had a household member who opened a financial account in the same financial institution after they did, supporting a potential business case to the bank in terms of cross-selling more profitable products to the parents and older siblings of youth savers.

  • Participation in savings programs can create social impacts on young people including the following.
    • Participation in savings (with or without financial education) may have a positive effect on young people’s self-esteem: MFO found that XacBank’s youth clients generally associated having a savings account with being an adult, and that girls with savings accounts, whether or not they had taken financial education, routinely said that having an account made them feel more mature. One girl who had an account, but who had not participated in the financial education, said, “When I think that I have money in the bank, it makes me feel satisfied. This has become something I can rely on. I feel like a grown-up and I’m very happy about that.”7 Population Council also saw that girl participants in a savings group are less likely to agree that “girls are not as good as boys in school” than girls in a comparison group. Similarly, participants are less likely to agree that some girls deserved to be raped because of how they behave.
    • Involving parents in financial education may positively impact savings habits: MFO found that girls who spoke with their parents about their savings account generally received encouragement from them. MFO notes that because girls in the financial education class had the opportunity to discuss the content with their parents after every session, class participation could potentially increase the encouragement they receive. If they open accounts, there is also an opportunity to earn encouragement. As a result, MFO believes that this may support the argument that savings coupled with financial education has a greater impact than savings alone.
    • Girls share with others: Although unanticipated, MFO found that many girls discuss their savings accounts with friends. One girl notes, “When I opened the savings account I was excited and had a nice feeling. It made me feel like I have something that others don’t have. My friends asked about it.”8 This suggests that the accounts and/or the financial education are having a multiplier effect on peers.
    • Girls who participate in savings groups are more likely than those who saved only, or their comparison group, to have a higher social capital and stronger social networks: Population Council found there was a statistically significant increase (17 percent) for girls who participated in the savings groups between baseline and endline, to agree that people in their neighborhood trust one another as compared to both the savings-only group and the comparison group, which showed no statistically significant difference in attitudes. The girls in the savings group were also more likely to have someone to borrow money from in an emergency. While there was an increase in this category for all three groups, it was greatest for the girls who participated in the groups (31 percent increase), as compared to those who participated in savings only (25 percent increase) or the comparison group (19 percent increase). Population Council explains that this is important because part of the aim of the program is to give the girls protective methods to mitigate emergencies (increase their savings networks), as savings alone isn’t always enough.
    • It is important to be aware of potential harm in offering youth access to financial services, including savings: Population Council found that the girls who participated in savings without a group were two times more likely to be sexually harassed and teased by males than girls in savings groups or than the comparison group. Moreover, there was a 61 percent increase in cases of girls in the savings-only program that had been touched indecently by a male with no increase for the girls’ savings groups and comparison groups. This data points to the importance of non-financial services, particularly for vulnerable girls, to accompany financial services. Training on the risks of savings and being publically economically active, in addition to strengthened social assets, friendship networks, and self-esteem, can help to mitigate the risk of harassment.
    • Girls with savings groups are more likely to have future life goals: Population Council maintains that education and employment goals are a reflection of a more concrete future orientation. During the baseline study there was no significant difference between girls with and without groups. However, at the endline, the girls with a savings group were significantly more likely to have future goals for long-term education (94 percent versus 88 percent); short-term employment (77 percent vs. 72 percent); and long-term employment (82 percent vs. 74 percent).
    • Savings groups help health: As part of the savings group with Population Council, girls receive HIV/health training. At the endline study, these girls were 3.5 times more likely than the girls who participated in the savings only program to name at least one correct method of HIV transmission. Similarly, they were two times more likely to know that you can do something to prevent HIV and three times more likely to know at least one method of family planning. One unexpected finding was that those girls who participated in the group were 1.5 times more likely to have had an HIV test than the girls who participated in the savings only group, which was not part of group activities, but something girls did on their own initiative.

Summary of Key Lessons Learned on the Effectiveness of YFS Models

While still preliminary, these project results support the argument for both increased YFS experimentation as well as for packages of services that integrate formal savings into a group setting that provide relevant and practical financial education and other non-financial services. Together these services can have a multiplier effect in supporting the development of a confident, healthy and financially savvy next generation. Future work may look not only at the impact of education in comparison to those who haven’t received it, but also how the timing of the education impacts changes in practices.