REPORT: Youth Savings Groups in Egypt - Learning Report 1, Oct 2016

Organization/Affiliation(s): 
Making Cents International
Resource Type: 

With funding from the International Fund for Agricultural Development (IFAD) and in partnership with Silatech, Making Cents International implemented the IFAD Rural Youth Economic Empowerment Program (RYEEP), a three-year grant seeking to increase employment and self-employment of young people aged 15-35 in the Near East and North Africa (NENA) countries of Egypt, Yemen, Morocco and Tunisia. The program provided capacity-building and technical assistance to local institutions to pilot models delivering youth-inclusive financial services (YFS) and non-financial services to rural youth and to the enterprises that employ them. By the program's end, RYEEP pilot projects delivered savings or credit services to 20,543 rural youth and non-financial services to 14,252 rural youth.

As important as these quantitative outputs was the knowledge generated by five pilots. Thus, a major focus of the program was to capture and disseminate this learning to help IFAD and financial services practitioners develop more effective and scalable programs for rural youth. The program, which built upon proven and successful methods, advanced learning around five research topics:

• Adapting and Developing Effective Financial Products for Rural Youth

• Determining the Appropriate Level and Delivery System for Supportive Non-Financial Services

• Using Technology to Lower Costs and Provide Youth with Alternative Forms of Finance

• Linking Products or Institutions to Facilitate Movement from Informal to Formal Structures

• Designing Innovative Approaches for Scaling Products in Rural Environments

The “Enterprise Your Life” pilot project in Egypt was the first to begin and produced valuable learning across these research topics. The project aimed to reach 10,000 rural youth through a youth savings group model that provides both savings and credit services, as well as life-skills-based entrepreneurship and financial literacy training. By project end, the pilot had adapted an adult-focused Village Savings and Loan Association (VSLA) methodology to rural youth, developed a youth-specific entrepreneurship curriculum, and launched the program in rural areas within three governorates. During the project, 10,784 youth joined savings groups and accumulated over188,000 USD in savings. The YSGs provided loans to 2,709 members, helping 1,884 youth begin or expand their income generating activities. In addition, 410 members opened savings accounts or borrowed from formal financial institutions. Considering that these positive results were achieved at a low cost per member ($30 per member for the pilot; $15 estimated for expansions), this experience suggests that (i) the “Enterprise Your Life” model is a cost-effective way to reach low-income rural youth, (ii) the combination of education and finance builds the confidence of youth to engage in income-generating activities, and (iii) the program can serve as a stepping stone to formal finance.

This Learning Report is one of six learning products to be delivered under the RYEEP grant. It introduces the learning agenda of the overall program and focuses on what has been learned from the pilot project in Egypt. Findings have been incorporated into the overall learning product  (Findings From Five Rural Youth-Inclusive Pilot Projects) which summarizes learning from the five pilots and suggests ways forward to most effectively advance rural youth financial inclusion in the NENA region.

Topic: 
Financial Inclusion
Regions: 
Middle East & North Africa
Tags: 
Financial Capability
Financial Literacy/Education
Youth