Emerging Perspectives on Youth Savings

CGAPs Focus Note No.82 examines the role of finance in the lives of low-income youth in developing countries with a focus on savings services. It presents the latest perspectives on the importance of savings for the youth market segment. The paper focuses on opportunities and challenges of offering savings services to youth from the perspectives of policy makers and financial service providers. It states that youth savings can promote asset-building, instill good financial habits, and improve a countrys overall gross savings rate. The business case for financial service providers is gaining loyal, long-term customers who will use a range of products over their lifecycle. The paper provides several practical considerations for policy makers and providers when targeting the youth market. It suggests that:

• Policy makers can take a test-and-learn approach to reducing barriers for the private sector to deliver youth savings;
• Coordination among government ministries is important ideally within a comprehensive youth policy;
• Financial service providers should innovate and experiment around understanding the youth market and examine whether this customer segment is profitable in the long run.