Assessment of the Effects and Behavioural Changes of Financial and Non-Financial Services on Youth

Financial diaries study of 280 YouthStart participants in Togo and Ethiopia

Youth in the developing world are faced with poor economic conditions and a lack of educational and employment opportunities. Of youth surveyed in 2012 by the United Nations Inter-Agency Network on Youth Development, 52% considered lack of access to financial services the major obstacle to entrepreneurship. Although progress has been made in the field of youth-inclusive financial services, youth still face many barriers to access such as age and ID limitations to open a savings account or access a loan, inappropriate and inaccessible financial products and services, and low financial capability to manage and regularly use the products and services.

This paper aims to add to the body of knowledge and understanding about the effects and impacts that access to financial services has on youth. It provides deeper insight into how youth: 1) manage their money, 2) use financial services and 3) plan ahead for their future. The research showed positive effects from the YouthStart (YS) program for each of these three categories. Findings include:

  • In terms of money management, participants of the YS program had nearly double the amount of net average income as youth in the control group in Togo and more than double that of youth in the control group in Ethiopia.
  • In terms of use of financial services, YS participants in both countries saved nearly 50% of the time during the research period through their YS account (the most frequently used savings option), followed by other informal means.
  • Participation in the YS program correlates with increased frequency of deposits across all savings mechanisms—particularly in the YS account—over time in addition to a higher ratio of number of deposits to withdrawals across all savings mechanisms and to the YS account.
  • Participation in the YS program encourages youth to plan ahead for their future and thus smooth the transition from childhood to adulthood and build financial capital.

About this Publication

By Hopkins, D. , Perdomo, M.