REPORT: Findings from Five Youth-Inclusive Rural Finance Pilot Projects, March 2016
Rural youth in developing countries make up a large and vulnerable group. Globally, three quarters of the poor live in rural areas, and about one-half of this population is young people. This young and growing population confronts a number of challenges, including poor quality of education, lack of basic infrastructure, lack of access to or control of sufficient land for farming, and, for girls in particular, more traditional cultural norms, which severely hinder their ability to build sustainable livelihoods. In addition, accessing the financial services they need to support economic opportunities is more challenging than in urban areas, due to physical distances, the lack of financial products appropriate to rural youth circumstances, limited knowledge and experience with financial services, and poor protection measures. These challenges feed perceptions from rural youth that financial services are not accessible to them, and from providers that rural youth are not bankable.
Yet offering young people in rural areas the right mix of appropriate and cost-effective financial and non-financial services is essential if rural youth are to improve their livelihoods and create economic opportunities that do not require migrating to urban centers or other countries. Although development agencies have experimented with the provision of financial services to youth in general over the past decade, most experimentation has focused on urban areas, savings services, and financial education. Much remains to be learned on how to develop, deliver, and scale financial services in rural areas.
The Rural Youth Economic Empowerment Program (RYEEP) was developed to respond to this need. Funded by a three-year grant from the International Fund for Agricultural Development (IFAD), the program sought to increase employment and self-employment of young people aged 15-35 in Egypt, Yemen, Morocco and Tunisia, and was implemented by Making Cents International, in partnership with Silatech. RYEEP provided capacity building and technical assistance to local financial service providers (FSP) to pilot five youth-inclusive financial (YFS) and non-financial service (NFS) delivery models to rural youth, and in the process, increase our understanding of rural youth, their demand for financial and non-financial services, and how they can be served sustainably and on a large scale.