 Welcome to this webinar on youth savings, experimentation for a new generation of savers. I'm Rani Deshpande with Save the Children, and along with my colleague Grosena Ramirez with Freedom from Hunger, we are delighted you are joining us for a discussion on youth savings mechanisms that are being tested in this emerging field. This webinar is part of the second day of discussions on savings for the poor that is taking place through the current USAID microlink speakers corner. By focusing on the emerging area of youth savings, we hope to set the stage for a broader discussion on savings strategies. Over the past few years, there has been a flurry of projects and initiatives targeting youth by financial service providers or FSPs, non-governmental organizations and funders, especially to provide saving services to young people. There are multiple factors that play behind this trend. First, development and microfinance practitioners see savings as a way for youth to safely keep their savings, which in turn can help them accumulate the necessary resources to acquire assets. The long-term expectation is that the accumulation of savings is a mechanism for investing towards the future of youth and for low-income young people to break the cycle of poverty that is passed from generation to generation. There is also a rationale for FSPs to focus on the youth market. Youth saving services could build consumer loyalty among target youth as they grow up and access a wider range of financial services. There is also an expectation that when youth become clients and learn about financial services, FSPs could cross-sell to their parents or other family members. And finally, reaching out to youth is part of a broader social mission and CSR strategies of many FSPs. Although it is too early in the field to tell conclusively what strategies are most effective in youth savings, we are at a good point to examine what is currently taking place in this field and to take a look at early evidence unaffectiveness. But first, it might be helpful to clarify what we mean by youth savings, especially since definitions of youth vary so widely. In some countries or projects, youth refers to anyone from early adolescence to early adulthood. In others, the official definition of youth starts at the age of majority to distinguish youth from children and may even go as high as 40 years. Most of the initiatives cited in this presentation target young people between the ages of 12 and 24, although not necessarily all young people within that age range. Many FSPs segment youth into finer age categories. The market research conducted on youth savers through these initiatives reveals some broad commonalities in young people's needs, preferences and behaviors with respect to savings. It might therefore be easier to work with a functional definition of youth savings rather than a client-oriented definition based on what we know about what youth want. We know, for example, that youth want savings that allow them to save very small amounts often from irregular income. We also know that many youth want to save for long-term goals but can often only manage to put aside money for short-term needs. They therefore value savings tools that will help them accumulate larger amounts over a longer term. Additionally, youth want to be able to access their savings whenever they need them for a variety of needs, including programmed expenses such as school fees and unexpected expenses such as health emergencies, as well as for contributions towards household expenses and their own personal needs. Last but not least, young people want their savings to be safe, especially safer than their other informal savings options. If these characteristics sound familiar, that's because they are. Such preferences are not very different from the types of savings that low-income adults want. Still, there are critical particularities in the savings needs of youth which have to be considered when offering them savings services. For example, youth want to be able to manage their savings and decide how to spend their funds. But in many countries, there are financial regulations that keep miners from owning and or operating their own savings accounts. This has implications for both autonomy and child protection, as it makes it difficult to give miners the independence and privacy they want with respect to savings. Given the legal framework, this often calls for setting up additional policies or processes to mitigate against the risk of adult abuse of the youth and or their savings. Another distinguishing feature is that young people are especially mobile, as many are forced to migrate either for work, education or marriage, and as a result need savings that they can use wherever they move. This phenomenon can be even more pronounced in rural areas. Finally, youth respond to different types of marketing and incentives than adults. Marketing to young people obviously needs to use language and imagery appropriate to their age and stage in life and the aspirations that go with it. But anecdotal evidence has shown that youth can be less sensitive to financial incentives than adults and more responsive to in-kind incentives such as gifts and giveaways. These unique characteristics call for experimentation with different approaches that can specifically address young people. Now that we've established a framework for understanding what we mean by youth savings, we'll turn our attention to sharing examples of youth saving strategies that are being tested around the world. Since this field is still in the early stages, it is difficult to claim any particular intervention as having proved conclusively successful. However, based on what we do know of youth needs and behaviors, we have identified examples that seem very promising. For this discussion, we will provide examples that focus on product design, marketing, delivery, and sustainability. In the microfinance industry, there is an explicit recognition of the importance of designing financial products that match the needs and preferences of the poor. Since savings accounts are relatively simple financial instruments, the experimentation taking place in the design of youth savings is primarily with mechanisms that enable youth to build significant sums from the sources of income that are even smaller and more irregular than those of adults. Lowering what you might call the barrier to entry for a savings account is therefore even more important for youth. A good example of an FSP addressing this barrier is PAMICAS in Senegal, a participant in the UNCDF Youth Start Initiative. Due to its cooperative structure, all PAMICAS members have to pay membership fees amounting to US$11 and by a share worth US$7.5. PAMICAS realized that this was too high an amount for youth to pay as a lump sum and could represent a major obstacle to youth uptake. So they decided to allow youth to join the institution and open a savings account while saving up the required membership costs over time. Restrictions on withdrawals can also provide the assistance with asset building that some youth want. As part of the YouthSafe project, HFC Bank in Ghana prohibits withdrawals from their youth savings account for the first three months and limits them to one per month after that. The idea is to facilitate and encourage self-control, which can be a particular issue with youth because of their lack of experience with money management and their developmental stage. Through its youth invest initiative in Morocco, MEDA is seeing evidence of the value of building the financial capability of youth through a very extensive training program called 100 Hours to Success, in which youth are required to open a savings account. MEDA has found that six months after the savings account is opened, 88% of trained youth were still using the account. Another way to encourage the accumulation of lump sums is to build a commitment mechanism into youth savings groups and group savings accounts. For example, in Mali, through Freedom from Hungers' Aim Youth initiative, youth commit to saving a specific amount on a weekly basis over a period of 9 to 12 months. Although amounts being saved are very small, they accumulate over the course of time to add up to more substantial amounts. As part of their weekly meetings, youth participate in financial education sessions and establish specific goals that can be met with their savings. But even with the best design products, we have to ask ourselves, if we build it, will they come? Marketing strategies are important for getting clients to learn about financial products, but it is not yet clear what specific marketing efforts offer the most value for money when targeting youth in developing countries. Common types of marketing efforts include community-based events, such as street fairs and meetings, which can incorporate fun events for youth like dramas, dancing, and games. When conducting such events, it is important to schedule them when youth as well as their parents are free so that the interest they generate can be effectively converted into account opening. This is especially true in countries where minors are not allowed to own or operate accounts by themselves. Many FSPs are also using mass media, such as TV and radio advertising, with messages specifically tailored for youth. However, evidence to date indicates that such expenditures are often unsustainable on a recurring basis. Moreover, they need to be supplemented with mechanisms that provide a personal connection between the FSP and the youth and their parents, which is critical for translating interest into account opening. There are also some new marketing initiatives involving virtual entertainment, such as online video games, but these are limited to developed countries. For example, the Doorway to Dreams Fund in the US utilizes video games to promote financial capability among youth. In developing countries, some FSPs are beginning to establish a presence in social media spaces, as with the cooperatives in Ecuador. But these efforts are very preliminary and have not yet been fully rolled out. Marketing campaigns also include incentives for youth to open up savings accounts or make deposits. A variety of different approaches are being tested. Some incentives, such as piggy banks or savings diaries, reinforce the goal of the product. Others are items that are popular with youth, for example, simple rubber bracelets that are being given away by Banco Caja Social in Colombia. In Ecuador, drawing from market research findings that pointed to cell phone airtime as one of the most common expenses for youth, cooperatives are providing airtime recharge cards when youth open up savings accounts or achieve a certain level of savings. Lessons from several girl savings initiatives funded by the Nike Foundation indicate that while such in-kind incentives for account opening are very popular with youth, they may also entail certain drawbacks. First, while providing incentives creates an expectation among youth, they can also be relatively high cost, which in turn can limit the number that can be distributed. Also, while providing incentives up front may encourage account opening, it does not necessarily incentivize continued account usage. We now turn to delivery channels for youth savings. Identifying appropriate strategies where services can reach youth can be challenging because of the constraints youth face, such as parents who limit where youth go outside the household or limits on their time due to obligations with school and household chores. For these reasons, many organizations are reaching out to schools where youth can be reached in large numbers. For example, Afla Tune has established very popular savings clubs in schools where children also receive social and financial education. Similarly, Women's World Banking and its partners Haas Bank in Mongolia and Banguaido Bem in the Dominican Republic promote their savings products at schools where they can also engage in financial education sessions. Involving schools and savings initiatives is also very promising because early evidence suggests that setting up transaction points in schools has been successful in stimulating transaction activity in accounts. However, the cost effectiveness and risk implications of such systems need to be further studied. Another limitation of traditional schools is that school children tend to be on the younger end of the spectrum. In order to address this, Plan International in West Africa is tapping into vocational schools to reach youth over 18 to form savings groups. School-based strategies are also more effective in places where school enrollment is higher, such as in Latin America. So in West Africa, where school enrollment levels are much lower, Freedom from Hunger and its partners, Kaib and Lutonius, are organizing youth savings groups in villages where it's easier to engage hard-to-reach youth through the Saving for Change for Youth initiative. Advances in technology could also prove to be very useful in making savings products more accessible to young people. East Africa is at the forefront of using technology and financial services, especially mobile banking. For example, Equity Bank is utilizing cell phones to enable youth to manage their accounts and receive financial education messages. In the Democratic Republic of Congo, Finca and UNCDF's Youth Start are installing point-of-sale devices at local merchants so youth can access their accounts for withdrawals, deposits, and balances. In Ecuador, Freedom from Hunger has partnered with Cooperative San Miguel de los Bancos to utilize smartphones to capture savings in the field. These initiatives are making it easier for youth to access their savings and creating the conditions for youth to make deposits in their accounts more frequently. With all this experimentation taking place in the field of youth savings, there are still many outstanding questions that we as practitioners want to understand better. Some of the main questions being asked are, in what context can youth savings be offered sustainably? How do we reach scale with formal youth savings products? What level of account opening can be expected from various types of financial education? How can we ensure that youth savings accounts remain active? And what strategies are most effective for central banks to modify current and know-your-customer requirements to serve vulnerable populations? The many initiatives that we have cited in this presentation will undoubtedly offer a great deal of rich experience to inform these questions. And we look forward to learning from them in order to understand how to offer young people more attractive and sustainable ways to build their savings. With this webinar, we have attempted to provide a snapshot of where the field of youth savings is with respect to strategies being tested. We hope that you will bring your own questions and perspectives to the broader discussion on savings for the poor that is currently taking place in the USAID MicroLynx Speakers Corner. Thank you for participating in this webinar and we look forward to hearing from you.