The Business Case for Youth Savings: A Framework
Proposing a framework for the business case for youth savings
This paper offers a framework for understanding how different influences or “levers” affect costs and revenues for youth savings and uses examples to explain how the framework can be applied as a decision-making tool.
Today, youth under age 25 represent nearly half of the world’s population (UNFPA 2005); tomorrow, they will be adults in need of financial services. Offering youth formal financial services, especially savings accounts, is likely to pay off for FSPs in the long term as these youth become adults who need other services and who are comfortable in the formal financial services environment.
However, despite this potential, there are unique challenges to banking youth. Youth are harder to reach through traditional channels, they are price sensitive, and their accounts tend to have very low balances. In many countries, documentation requirements can be a barrier to youth entering into the formal financial sector. Given these challenges, many FSPs are wondering whether it makes sense to offer youth savings from a business case perspective, and if so under what conditions.
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