Webinar Recording: Rural Youth Finance - A Bridge too Far?
Making Cents International and RTI International
Jan 11, 2017
Rural youth tend to be the least financially included: youth financial inexperience and limited assets exacerbate the basic rural finance challenges of low population density and poor infrastructure. Nonetheless, they demand financial services to manage their resources, build assets, and invest in livelihoods or education. How should the financial sector react to this situation – try to serve rural youth directly with new products and services, focus on the “near adults” in a rural finance strategy and deepen services over time, or ignore this population until the challenges of rural finance can be overcome? 136 financial inclusion practitioners came together on January 11th to discuss these issues and determine whether rural youth financial inclusion was possible, or simply a bridge too far.
USAID began the discussion with Paul Nelson, Digital Finance Advisor, describing how the agency sees digital finance as the key strategy for financial inclusion in general, and especially for hard-to-reach rural areas. He emphasized that the potential cost savings of digital finance – reducing transaction costs by as much as 30% - could bring an array of financial services within reach of rural and especially more tech-savvy rural youth populations.
Timothy Nourse, President of Making Cents International, agreed. Drawing from a recently completed project for IFAD and their larger portfolio of financial inclusion projects, Tim confirmed that exploiting new technologies was key to rural youth inclusion. However, he pointed out the importance of other key lessons as well – that product adaptations were necessary for both rural and youth contexts, partnerships with a variety of for-profit, governmental, and not-for profit actors were necessary to penetrate rural areas, and that building capacity as you build assets were especially important for younger youth cohorts. Perhaps most critical, Tim asserted that the best strategy for rural youth financial inclusion would be through adults – as the infrastructure and products that successfully served rural adults could be adapted to target economically active rural youth first, followed by deeper penetration later.
Sarah Mattingly, RTI’s Senior Workforce and Youth Economic Opportunity Specialist, focused on the Building Capacity as you Build Assets aspect of youth financial inclusion. She described how the USAID supported K-YES project in Kenya built the skills of rural youth as a pre-requisite for access to even simple financial platforms such as Village Savings and Loan Associations (VSLA). In addition, while recognizing the potential of technology to reduce costs, noted that the still weak digital infrastructure in rural communities prevented it from being exploited.
Alison Boess, the former Deputy CEO for FINCA Microfinance Bank Nigeria and now Senior New Business Development Officer, emphasized key strategies for serving rural youth. She described how FINCA had tried to target children and younger youth cohorts (up to age 24), but found it too expensive to sustain. Instead, they opted to use digital platforms to lower costs and serve rural adults and the most economically active (and oldest) youth cohorts.
Is rural youth financial inclusion still a bridge too far? In the end, panelists agreed that it depended on what youth you were serving. Financial inclusion for older and economically active youth is definitely feasible, especially when facilitated by digital platforms. VSLAs also offered a promising means for helping younger youth cohorts build assets and skills. Nonetheless, for most rural youth, formal financial services still remain out of reach.
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Digital Finance Advisor, U.S. Global Development Lab, USAID
Paul Nelson provides technical expertise to the team's market engagement and private sector investment portfolio, where he shapes USAID-funded financial inclusion activities in priority countries and has developed the Digital Finance Team’s approach for collaborating with donor partners and private sector actors to overcome barriers to growth for inclusive financial services. Paul also serves as grant manager for multiple awards, including the Better Than Cash Alliance, Consultative Group to Assist the Poor, and a project to strengthen digital finance agent networks in West Africa. Before joining USAID, Paul served as a Peace Corps volunteer in Nicaragua, focused on community banking and entrepreneurship, and he co-founded a (dearly departed) start-up tied to architecture and design professionals. He continues to provide advice to siblings with their own start-ups. A licensed attorney, he focused on entrepreneurship (M&A) and regulatory law at the University of Wisconsin Law School and has undergraduate degrees in economics and architecture from the University of Minnesota.
President, Making Cents International
Tim has focused most of his 20-year career on the financial and economic inclusion of vulnerable and underserved populations. He has managed microfinance institutions and country-wide inclusive finance programs; designed economic recovery programs for refugees and IDPs; and developed economic inclusion programs for youth, women, and smallholder farmers. At Making Cents, Tim serves as President, managing Making Cents' overall operations and implementing the company-wide strategic plan. Beyond international development, Tim is part of the local food movement, supporting the growth of his family’s 300-year old farm in Massachusetts.
Senior Workforce and Youth Economic Opportunity Development Specialist, RTI International
Sarah Mattingly is an economic growth specialist with more than 15 years of experience in economic growth initiatives, and particularly with workforce development, microenterprise, livelihood, agriculture, local capacity building, and new business development. Before joining RTI, Ms. Mattingly was a Project Director in FHI 360’s Economic Development Livelihoods department and a Program Officer at the World Bank Group.
Former Deputy CEO, FINCA Microfinance Bank (Nigeria); current Senior New Business Development Officer, FINCA International
Alison Boess has a decade of experience in planning, strategy and management of financial services for marginalized communities, especially in Africa. Alison first joined FINCA in 2007, working with the Executive Office at FINCA’s headquarters in DC. In 2008, Alison went on to Kampala, Uganda to support FINCA Africa’s operations as the region introduced new products, began agency and mobile banking, and doubled its client outreach. Beginning in 2012, Alison led assessment and strategy for FINCA’s microfinance start-up in Nigeria. Next as Deputy CEO for FINCA Nigeria, Alison was responsible for multiple aspects of the operation, including product design, delivery and marketing. In her current role with FINCA, Alison focuses on building long-term philanthropic partnerships with corporations and foundations to advance FINCA’s mission at a global level. Prior to her work with FINCA, Alison’s career focused on public policy and advancement of non-profit organizations in Arizona. Alison earned her B.A. in International Studies at Pepperdine University in California.