Financial Services for Young People: Prospects and Challenges
In recent years, there has been a growing recognition of the economic and social obstacles low-income young people face in making successful transitions to adulthood. The ability to manage money, build assets safely and plan for the future is a core component of a larger set of economic and social assets required to achieve more sustainable livelihoods. The MasterCard Foundation has funded and tested a range of approaches and models to deliver financial services and education to young people, most of which were related to the provision of savings services for low-income youth, (as opposed to credit or other financial services).
The MasterCard Foundation engaged The Boston Consulting Group (BCG) to conduct a review of progress to date of its portfolio, using monitoring reports, mid- and end-term evaluations and other literature on programs to provide a sense of the current state of practice in this field. This review involved four major areas of inquiry:
- Exploring how to better understand youth populations through customer segmentation;
- Studying the preliminary evidence of the impact financial services can have on young people’s lives;
- Understanding whether a business case exists for delivering traditional financial savings services to young people; and
- Identifying the challenges involved in providing effective financial education.