Exploring the benefits and risks of cryptocurrencies for children and youth

​​Author: Ricardo Ribas Santolim

Countless articles have been written recently about the extreme rise, and potential fall, of Bitcoin. CYFI can see that the public interest in, and usage of, cryptocurrencies is expanding rapidly. The market cap value of each of the four main cryptocurrencies, Bitcoin, Etherum, Bitcoin Cash and Ripple, has already surpassed US$9 billion. Currently, the CoinMarketCap registers the existence of more than a thousand cryptocurrencies with the total market value increasing from US $7 billion in January 2016, to US $17 billion in January 2017 and US $302 billion in November 2017. Will this exponential growth continue? It is not possible to be sure, but the probability seems high enough to raise questions about how to prepare the public, and particularly children and youth, for the emergence of cryptocurrencies in the global economy.

Better than traditional currencies?

Money has three main functions: medium of exchange, store of value, unit of account. Currently, no cryptocurrency fulfills all three roles well. The excessive volatility prevents it from being a good store of value or unit of account. As a medium of exchange, its increased use and consumer acceptance have shown that cryptocurrencies have the potential to fulfill this role well, but a more widespread acceptance by governments would be necessary to increase their use in this area.

A lot of hype is building up around cryptocurrencies and blockchain but there are many warnings coming from financial regulators about their potential risks. The market is still extremely volatile and prudence needs to be adopted so it does not repeat a dotcom bubble from the late 1990s and early 2000s. This notorious volatility poses a huge risk to cryptocurrencies as investments. For example, between January 1st and November 27, 2017, Bitcoin value rose more than 800 percent. But this wasn't a steady rise. Between just November 8 and 12 or September 12 and 15, the value decreased more than 25 percent. Similar fluctuations, up and down, are common. In addition to this volatility is the fact that the cryptocurrencies are difficult to value in this rather incipient market, often under the control of a few large users with the ability to influence prices. Proof of this vulnerability and risk is the increasingly long list of cryptocurrencies that have failed.

Crypto currency is not a fiat currency, meaning that the currency is not supervised, has no backing from a deposit guarantee scheme nor are the enterprises trading in them supervised. Furthermore Cryptocurrency entail a high integrity risk, including money laundering and financing of criminal activity. Central Banks are also weary of crypto currencies, as evidenced by the following statement on their website, "De Nederlandsche Bank (DNB) has special attention for the rise and growing popularity of virtual currencies, including bitcoins and litecoins. The development of virtual currencies is gaining momentum. At present, they fall outside of the scope of the Dutch Financial Supervision Act (Wet op het financieel toezicht or Wft). Consequently, DNB does not supervise virtual currencies or enterprises trading in them. DNB advises consumers to be aware of this and the potential risks of buying bitcoins or other virtual currencies. The exchange rates are volatile and there is no central issuing institution that consumers can hold liable should the need arise. Moreover, the deposit guarantee scheme does not apply.

Cryptocurrencies and the developing world

Despite these shortcomings, cryptocurrencies are promising present a series of potential benefits, especially in the developing world. The International Telecommunication Union (ITU) estimates that, in 2017, 48 percent of people access the internet in the world. In 2005, that amount was 15.8 percent. Proportional growth in internet access is even more pronounced in developing countries, where this figure jumped from 7.7 to 41.3 percent, and least developed countries, from 0.8 to 17.5 percent. As the main requirement for access to cryptocurrencies is internet access, the industry's growth potential in this regard is also huge. These regions are often where the costs of financial transactions are higher, due to a less developed financial system along with liquidity and institutional capacity problems. It is precisely in this type of environment that the expansion of cryptocurrencies becomes increasingly attractive.

It has been said that currently no cryptocurrency fulfills well the three roles of money, but often, especially outside developed countries, local currencies also fail. In cases like Zimbabwe, which has been facing a cash shortage since 2016 or Venezuela, where the annual inflation rate exceeds three digits, cryptocurrencies would have an advantage over existing local currencies. If it is difficult for virtual currencies to compete with stronger currencies like the euro or the dollar, it may be easier for them to stand up against weaker currencies around the world.

In addition, traditional remittances take several days to arrive at their destination, unlike transactions with cryptocurrencies. The opportunity for cryptocurrencies is greater where the financial services with which they compete have high costs and are inefficient. The potential of cryptocurrencies and blockchain is considerable, not necessarily as a currency (much less as an investment), but certainly as a payment system. On the other hand, access to cryptocurrencies depends on reliable access to internet, energy, computers and smartphones, what can be complicating factors outside developed countries.

The ITU estimates that, in 2017, 67 percent of young people (15-24 years old) in developing countries and 30 percent of young people in the least developed countries are online. In Tanzania, Somalia, Kenya and Uganda, more than 30 percent of the population over 15 have access to mobile accounts. In Kenya in particular, the reach is almost 60 percent for the population between 15 and 24 years old. If young people do not have the financial services that meet their needs in the traditional financial system, there is a greater chance that they will pursue cryptocurrencies for both payments and as a store of value.

How to protect children and youth

In response to growing digital payments, CYFI has published a series of guidelines for financial services aimed at children and young people, including restricting inappropriate products, promoting responsible spending and educating minors on how to use their payment cards safely. These recommendations would also be relevant to a mobile wallet service linked to a cryptocurrency. Other controls can be applied more clearly to cryptocurrencies. A multi-signature system[1], for example, could require parental approval for transactions above a certain value. The wallets[2] could limit the value of transactions, provide consumer behavior for parents, provide tips for conscious consumption, among many other possibilities.

Safer Payment Guidelines - elaborated based on Safer Payment for Minors, Child and Youth Finance International and MasterCard Incorporated International (2017)

It is important that financial education, especially when aimed at children and youth, openly addresses contemporary financial issues, online security and the opportunities and risks offered by the rise of cryptocurrencies.

Safe online practices recommended by CYFI are also applicable for using cryptocurrencies: use strong passwords, change them frequently, update software, use antivirus products, be wary of using suspicious Wi-Fi networks, be cautious when downloading, be wary of giving apps permission, and be aware of other users' experience with online stores before conducting purchases. Other security practices apply more specifically to cryptocurrencies, such as use different wallets to dilute risks, back up information to protect against data loss, use two-factor authentication or multi-signature systems to enhance security. Teaching and study on the subject are essential, especially since the cryptocurrencies principle is based on the absence of a regulatory body. This increases the liability and risk, bringing a great deal of responsibility to the user. If the cryptocurrency is misused, the damage is difficult to recover and, in the absence of a central organization, there is no way to retrieve a lost password. All this requires increased user care.

Financial education builds one's ability to confidently manage financial resources and navigate financial systems. In this sense, young people gain an understanding of the importance of planning and building a future through financial responsibility, not through highly speculative and risky investments. The idea of ​​easy money offered by cryptocurrencies is tempting, particularly for children and youth, but there are significant risks involved. It is essential that the financial education offered to the next generation includes an open discussion on cryptocurrencies, bringing in parents and guardians to increase accountability and protection.

Final comments

Cryptocurrencies will be unavoidable in the future. Attempting to deprive children and young people of accessing these currencies can create a system where they use them without proper knowledge and preparation, exposing them to greater risks. In this sense, an official positioning of governments regarding the legality of cryptocurrencies is important. Otherwise, it is difficult to imagine that the topic will be explicitly integrated into national financial education initiatives. Cryptocurrencies have the potential to help many people around the world, especially in developing regions. A full understanding of how cryptocurrencies work, which is essential to ensuring its safe and intelligent use by young people and children, requires knowledge that goes beyond what has traditionally been addressed in financial education programming. Children and youth should be prepared to deal with a future where cryptocurrencies are a significant part of financial systems.

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Zimbabwe takes steps forward with youth financial inclusion

Much of the news coming out of Zimbabwe in recent years has focused on the challenging financial and economic environment facing the country. A recent legacy of runaway inflation, rising trade deficits and poor financial liquidity has severely hampered economic growth and deflated public confidence in the formal financial sector. Despite these setbacks, the Reserve Bank of Zimbabwe (RBZ) released an ambitious National Financial Inclusion Strategy (NFIS) in 2016, aiming to extend financial services to 90% of the population by 2020. The NFIS makes explicit reference to children and youth as a key target group, emphasizing the importance of building financial capability of the next generation of Zimbabweans.

In an effort to accelerate this aspect of the NFIS, RBZ partnered with CYFI and the People's Own Savings Bank (POSB) to carry out a two-day Product Development Workshop and National Stakeholder Gathering in Harare on 19-20 October. With participation from Aflatoun International, FinMark Trust and the World Bank Group, the workshop covered a variety of topics relevant to the provision of financial services and financial education to children and youth in Zimbabwe. Sessions included those on the impacts of financial inclusion and education on young people, the business case for youth financial services, the financial needs and wants of children and youth, regulatory solutions to increase youth financial inclusion and curriculum integration models for social and financial education.Participants also had the opportunity to learn from the experiences of other government authorities and financial literacy champions in the country, with guest speakers from the Bank of Zambia, the Reserve Bank of Malawi and the Banking Association of South Africa.

The workshop benefited from having such a diverse set of relevant stakeholders in attendance, all interested and engaged in various aspects of the NFIS. This included representatives from the RBZ, the Ministry of Finance, the Ministry of Education, the Zimbabwean Youth Council, commercial banks, microfinance institutions, academics and non-government organizations. The conference concluded with the participants breaking into thematic groups to further discuss challenges and solutions for the regulatory environment, financial service provision and the expansion of quality financial education throughout the country. Draft action plans were outlined, indicating the resources needed and roles and responsibilities required to carry out the desired initiatives.

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CYFI and NAFI publish joint report on Consumer protection and security of savings and payments for minors

Child & Youth Finance International (CYFI) and the NAFI Research Center have published the report on consumer protection and security of savings and payments for children and youth.

The world of financial services is changing. With the rapid development of the financial system, children and youth are becoming more involved in financial decision making at a very early age. The current legislation of many countries allows them to use various financial instruments for payments, transfers and savings. A trend towards creating special youth financial products and services can also be found in developing countries, as they aim to increase access to financial services and boost financial inclusion rates among its populations.

This early exposure to financial products helps children learn about money matters and managing their personal finances, but it also brings risks, as the increased role of digital finance entails new risks related to the quality of products and services offered to young clients, who are particularly vulnerable group when it comes to safety and security issues. Young people currently face more complex financial environments, instruments and products than previous generations, underlining the importance of building financial capabilities and ensuring the necessary consumer protection alongside the proliferation of new financial products and services.

The joint CYFI & NAFI report "Children and Finance: Consumer Protection and Security of Savings and Payments" addresses the important issue of how to protect young people in financial markets. This becomes increasingly difficult as technology advances. The report analyses the potential risks and mitigation strategies of various products for different age groups, based on their characteristics and current industry practices. It defines potential international guidelines and recommendations on appropriate financial consumer protection and outlines the crucial role financial literacy plays in protecting and empowering young people in a world of fast‑pace financial innovation and widespread digitalisation.

Protecting young people online, and teaching them necessary skills to appropriately and safely use the variety of financial services available to them is one of the big challenges of the next few years. This report represents an important and informative initiative to different stakeholders working on the regulation of financial services and data protection, as well as highlights various industry practices that are of particular relevance to the financial services providers across the globe.

This is the second publication in the series of "Children and Finance", initiated by NAFI in 2015. The research summary of the first report on financial awareness of Russian youth can be found here.

Speaking with regard to consumer protection for children and youth, Sue Lewis, Chair of UK Financial Services Consumer Panel said:

The world of financial services is changing rapidly. Children as young as six have access to apps that let them manage their pocket money online, and they can use a pre-paid card for spending. Nearly one in five 8-14 year olds in the UK has a credit card on their parents' account. Many also have bank accounts. Early exposure to financial products helps children learn about money matters, but it also brings risks, as young people are often under pressure to spend, and spending is easy with 'contactless' payments and cards. It doesn't seem like real money, until the bills come in.

The NAFI & CYFI report tackles the important issue of how to protect children and young people. This will become more difficult as technology advances. 'Big data' offers possibilities for firms to target children and young people. Three-quarters of 12-15 year olds have a social media profile. They may not realise their data can be 'scraped', and used to promote products or sold on. Protecting young people online – and teaching them how to help protect themselves – is one of the big challenges of the next few years. This will require co-operation between financial services and data protection regulators, and for them to take account of the particular needs of children and young people.

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Third Meeting of CYFI Regional Working Group for South-Eastern Europe held in Kosovo

The third meeting of the CYFI Regional Working Group for Youth Financial Education and Financial Inclusion for South-Eastern Europe took place on 5-6 October in Pristina, Kosovo. The 2017 meeting was hosted by the Central Bank of the Republic of Kosovo, in cooperation with Kosovo Bankers Association and the Development Facility of the European Fund for South-Eastern Europe.

The meeting brought together more than 25 international participants-members of the Working Group from across the region, including representatives of the central banks, other financial regulators, ministries and educational authorities, as well as more than 40 local stakeholders interested in advancing financial education and financial inclusion agenda in Kosovo.

Participants discussed trends and developments in advancing financial education and financial inclusion national agendas and policy, specific programmes and initiatives targeting children and youth in the countries of the region, plans for the future, and exchanged the experience and best practices in targeting the youth segment. 

The CYFI Secretariat as also presented the publications, work and regional research from the field, including the joint CYFI & EFSE DF publication on "Insights into Financial Behavior and Knowledge of Children and Youth in Selected Countries of South-Eastern Europe". The study was conducted in the second quarter of 2016 and included in-depth focus groups and interviews with children and youth between 10 and 24 years old, as well as wide quantitative study of more than 2,000 children and youth people across 7 countries of the region. The full report of the research is available here

Mastercard representatives participated as guest speakers to the Working Group meeting, and presented the recently launched by CYFI & Mastercard Guidelines on Safer Payment Products for Minors, as well as opened the discussion on the role of both private and public sectors in promoting youth financial literacy by facilitating the access to digital financial products in a safe and responsible way.

The meeting also saw the Launch and Inauguration of the National Financial Literacy and Training Center of the Central Bank of Kosovo, the new facility that was recently renovated and re-opened in the ancient city of Prizren, with the support of EFSE. The Working Group members also had a chance to visit and have a tour around the Center's facilities on October 6th.

The Central Bank of Kosovo (CBK) has also awarded a special recognition to Child & Youth Finance International for outstanding contribution in the advancement of financial education agenda in Kosovo. CBK's contribution to bringing the national stakeholders together and promoting financial education for children and youth was recognized by Ms. Shkendije Himaj, Coordinator for General Function in CBK, as well as an important role that the Working Group plays in promoting the best practices in the field across the countries of the region, and how they can learn from each other's experiences.


About the Working Group

The Regional Working Group for Youth Financial Education and Financial Inclusion serves as the place for sharing best practices, exchanging experiences, identifying technical assistance opportunities to support action plans development and implementation by CYFI Secretariat and its network. As of June 2017 more than 24 governmental institutions from 10 countries of the region (central banks, financial regulators, ministries of finance and education) are members of the Working Group. 

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CYFI facilitates Product Development Workshop in Madagascar

CYFI's Managing Director, Wessel Van Kampen, and Regional Coordinator for Africa, Anne Reynaud, recently visited Madagascar to meet with various key national stakeholders in Madagascar's capital Antananarivo.

As part of this, CYFI facilitated a product development workshop, co-organized and co-hosted with our local partners the Coordination Nationale de la Finance Inclusive.

More than 50 participants attended the Product Development Workshop, which focused on discussing the creation of a SchoolBank pilot and the adoption of the concept to align to the local circumstances. Participants shared their views and ideas on the best strategy to successfully implement a SchoolBank in Madagascar starting the new school year.

One of the goals of the workshop was to emphasize the importance of Financial Products adapted to Children and Youth. The workshop aimed at underlining the importance of having both Financial Education and Financial Inclusion. The workshop presentation pointed out the positive outcomes for a country population to have financial education and financial inclusion such as better academic achievement for example. The importance of a good consumer protection framework to develop financial inclusion and education was also stressed during the workshop presentation.

The workshop also highlighted the fact that the financial inclusion of children and youth represents a great opportunity for financial service providers. The goal of the workshop presentation was also to highlight that children and youth represent an opportunity for financial service because children are easy to reach and use low cost self-serve channels for example.

The main outcome of the workshop was the implementation of the SchoolBank program in Madagascar. SchoolBank aims to increase financial inclusion of children and young people through the school system. Through an innovative multi-stakeholder approach, the goal is to create systems change by providing children and youth with a Child & Youth Friendly bank account that they can use to save money, while at the same time imparting the appropriate education to teach them why and how to save and what their economic rights are.

The workshop in Madagascar brought together all national key stakeholders essential for a successful implementation of the SchoolBank program. All participants of the workshop expressed their willingness to collaborate to implement the program. All local financial service providers already have financial products adapted to children and youth. Next steps will build upon the various existing contacts between local banks and schools in the capital of Antananarivo, but will also expand to the more rural Southern part of the country.

The Coordination Nationale de la Finance Inclusive is also currently working on the draft of a National Strategy of Financial Inclusion with a strong emphasis on Children and Youth and are leading the organisation of GMW in Madagascar since 2016.

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National Bank of Georgia Hosts CYFI Child & Youth Friendly Product Development Workshop

The National Bank of Georgia (NBG) hosted Child and Youth- friendly Product Development Workshop in Tbilisi on 13 and 14 of July 2017. The workshop was facilitated by experts from Child & Youth Finance International (CYFI), and was part of the broader NBG-CYFI cooperation on promotion of financial education and savings culture for children and youth in Georgia.

Governor of the National Bank of Georgia Koba Gvenetadze opened the workshop and encouraged commercial banks to invest in developing financial capabilities of children and youth. During the workshop participants from 7 commercial banks in Georgia discussed the importance of the youth financial literacy and financial inclusion, product design, needs and wants of the young generation, as well as the business case for developing child and youth-friendly banking products. CYFI experts shared international experience and best practices in the field, while NBG specialists discussed the regulatory framework, consumer protection principles and NBG's planned activities in the direction of financial education for children and youth. CYFI partner, Savings Banks Foundation for International Cooperation (SBFIC) also shared with the participants the German experience in developing financial products for children and youth. The workshop was also attended by the representatives from the Ministry of Education and Science of Georgia, who stressed the importance of financial education at schools and perspectives on integration of financial education into the school curriculum, and discussed the Ministry's cooperation framework with NBG.

Children and youth are one of the main priority target groups within the frames of the National Strategy for Financial Education that Georgia adopted in 2016. As part of these efforts, NBG and CYFI have been working on implementing the SchoolBank project in Georgia since 2015. The project aims to provide school children with financial education classes, as well as the real opportunity to practice savings and easy transactions by providing them with safe banking products, such as depositing small savings on the bank account or paying for lunches with a debit card.

"In today's world, the young generations have to make important financial decisions at increasingly earlier stages of their lives. For this purpose, children and youth not only need theoretical financial knowledge, but also the ability to apply financial literacy to practical situations. Thus, it is crucial for the young generation to have access to appropriate financial products and services, in order to develop healthy financial attitudes, save money, set financial goals, and expand their opportunities. In this process, it is imperative to protect children's rights and interests. In a long-term perspective, these initiatives will help the youth become economically active and financially responsible citizens, reinforcing their financial well-being" - stated Koba Gvenetadze, Governor of the National Bank of Georgia during the opening ceremony of the event.

July 12th marked another milestone in the advancement of the SchoolBank project in Georgia. National Bank of Georgia and National Youth and Children Palace of Georgia (NYCP) signed Memorandum of Understanding (MoU) on implementation of 15-hour SchoolBank educational programme as an extra-curriculum class for secondary school students in Tbilisi, that was developed by CYFI and Aflatoun, and further adapted by NBG in 2016. CYFI supported NYCP with its financial education programme since 2015, and supported teacher trainings of NBG, NYCP and Ministry of Education staff. NBG and CYFI signed an MoU covering these areas of cooperation earlier this year.

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CYFI holds Product Development Workshops in Chile and Peru

​ Child and Youth Finance International (CYFI) recently hosted two Product Development Workshops with Instituto de Estudios Peruanos (IEP) in Lima, Peru and Santiago, Chile. 

The purpose of the workshops was two-fold; CYFI and IEP intended to bring together the dominant organizations in the financial inclusion and education sectors in both countries to talk about the achievements in the field so far and look ahead at the progress still to be made. In addition to this, workshops focused on on the development of child and youth friendly banking products in both countries. 

As part of the worshops, multiple banks and other financial institutions looked at the opportunities and challenges to increase financial inclusion rates and financial capabilities of young people by discussing regulatory frameworks, financial education material, need and wants of children and youth, and marketing of banking products. These discussions were fueled by presentations from CYFI, IEP and various expert speakers from the Alliance for Financial Inclusion (AFI), Banco Caja Social from Colombia and ADOPEM from the Dominican Republic. 

One of the principle outcomes of both events is commitment to the dedicated effort of improving existing and developing new banking products for children and youth and the implementation of SchoolBank in Chile and Peru.

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Launching the Ye! Stream

The Ye! Stream is the newest addition to the Ye! Website!

Ever needed a business-related question answered immediately? Then the Ye! Stream is the place to go! No time to wait? No problem. Providing an interactive news feed and online forum, the Stream will be accessible to Ye! Community members—both coaches and entrepreneurs. The stream will allow members to dialogue directly amongst one another. 

Log onto the Ye! site, head to the stream page and post your questions directly to the community. Have a question on how to use a tool or about the legal structure in a certain country? Post it to the stream and have the community of young entrepreneurs respond with their personal experiences, insights, and advice. The stream will be available to members in both Arabic and English.

The Ye! Live Stream will also feature, "Ask a Coach" bi-weekly sessions. These live sessions will feature a coach or a business expert responding to community sourced questions in real-time. Coaches will be available for one hour at a scheduled date and time to answer all your most pressing entrepreneurship questions. Prior to the coach's appearance on the stream, a short bio explaining their experience and area of expertise will be posted to the Ye! Blog and subsequent social media channels. Questions, topics of interest, and the expert's follow-up advice will also be posted to the Ye! Blog following each session for anyone who missed out.

Join Ye! In launching the Ye! Stream and see what the global community of young entrepreneurs has to offer.

Are you an entrepreneur age 16-30? Apply to become a member of Ye! and join the global community of young entrepreneurs www.yecommunity.com/en/register



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Raising the Profile of Economic Citizenship in Education and Development Discourse

A significant part of CYFI's advocacy agenda has been to put economic citizenship for children and youth at the forefront of policy discourse and programming aimed at increasing financial capability and economic opportunities for young people.

Recently, CYFI published an article in the development education journal Policy & Practice entitled "The Role of Economic Citizenship Education in Advancing Global Citizenship". The article focuses on how to provide children and youth with the appropriate skills and capabilities required to create a more equal and sustainable world for future generations. It presents the concept of Economic Citizenship Education (ECE) and the importance of combining financial, social and livelihoods education for the empowerment of children and youth throughout the world. The article argues that the combination of financial inclusion and education is vital for successfully empowering children and youth. Throughout the article, this concept is linked to global citizenship, education for sustainable development, development education and the Sustainable Development Goals (SDGs) to show its importance to contemporary discourse on education and youth development. 

These themes build on CYFI's other publication specifically linking economic citizenship to the SDGs, particularly those focusing on poverty reduction, education, gender empowerment, economic growth and peaceful, sustainable societies.

There are currently 1.8 billion young people in the world, representing 25 per cent of the global population, with 87 per cent of this youth population residing in developing countries. These figures are projected to increase in the coming years with both challenges and opportunities for youth development. The challenges include the fact that, while children make up around a third of the global population, almost 47 per cent of those struggling to survive on less than $1.25 a day are 18 years old or younger. There are also 58 million children around the world that are not enrolled in school, which threatens their ability to sustain themselves in the future.

Within their economic and social environment, education plays a vital role in providing these young people with the financial, social and livelihood competences and opportunities needed to thrive and prosper. It is imperative that education delivers meaningful and useful skills to children and youth, and that it remains an integral part of their personal and professional development. If children acquire the skills and experiences of managing financial resources from an early age onward, it will enhance their awareness of financial risks, lower their economic vulnerability and allow them to make more responsible financial decisions. In addition, the inclusion of social and citizenship education ensures that young people develop financial capabilities that are rooted in socially responsible attitudes and behaviours.

The political and economic decisions of world leaders today and tomorrow not only dictate the future of world economies but also the future sustainability of societies and the environment. It is therefore extremely important that these decisions are made in a holistic and responsible manner, balancing financial, social and environmental considerations. ECE is critical to the development of global citizenship by creating an environment where children and youth are able to fully realise their social and economic potential and contribute to community development, without discrimination of any kind. These are the essential economic citizenship competencies that will provide the foundation for the next generation of political, business and social leaders.


Photo credit: Giacomo Pirozzi for Aflatoun International

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OECD PISA Results 2015: Outcomes and new insights support CYFI’s vision

Author: Wessel van Kampen, Managing Director CYFI​ 


The OECD Programme for International Student Assessment (PISA) recently released the results on financial literacy from 2015. CYFI attended the results launch event in Paris.

In addition to testing students' skills in mathematics, science and reading, the 2012 and 2015 editions of PISA also explored students' experience with, and knowledge about, money, providing an overall picture of 15-year-olds' ability to apply financial knowledge and skills to real-life situations. In 2015, around 48 000 students participated in the financial literacy test, representing about 12 million 15-year-olds in 15 participating OECD and non-OECD countries. 


Supporting CYFI's vision

CYFI has been advocating for an integrated approach of financial education and financial inclusion for the past five years, but until now little empirical evidence seamed to support such claims. The 2015 PISA results, alongside with other research and experiments recently led by the CYFI Secretariat (such as the implementation of SchoolBank projects around the world and the research led in seven East European countries on the attitude of youth towards the financial system) supports CYFI's claim and call for more attention to programs which integrate the two components.

The inclusion of a financial literacy assessment in PISA is the result of the unique collaboration between the Education Division and the International Network for Financial Education (INFE) of the OECD. It is based on the profound understanding of the fact that young people in both OECD and non-OECD countries are already involved in financial systems, are taking part in increasingly complex financial transactions, and are going to enter a financial work environment in their adulthood that is far more complex than that of their parents or teachers. Children are also already deeply engaged with money from a young age – more than 60 percent of 15-year-olds in participating OECD countries earn money from some type of work activity, 56 percent already have a bank account, and 19 percent have a prepaid debit card. At the same time, the results reveal that less than one in three students have the necessary skills to manage a bank account!

When compared to the results from 2012, only Russia and Italy have made any progress in increasing the financial literacy of students. This is of course a distressing result, considering the ever increasing engagement of youth with money, and the amount of work that has been done in the field over the past years. However, positive outcomes reveal that across all countries and economies, very few gender differences were detected in the levels of financial literacy among the 15-year olds surveyed. This finding is in contrast with the results of many adult financial literacy surveys, where women in most countries consistently score lower on financial literacy indicators than men. While the nature of this difference in financial literacy between adult males and females is not yet fully understood, it will be interesting to see whether this gender gap will continue when this next generation reaches adulthood or if we are on a path to closing the gender gap both in terms of financial inclusion and financial literacy.


Furthering youth financial literacy

The 2015 PISA results also confirmed that practical applications of financial knowledge and behaviours have a strong impact on financial literacy levels. Evidence shows that there is a positive relationship between performance in financial literacy and holding a bank account or receiving gifts of money. Moreover, students who are more financially literate are more motivated to use financial products, and perhaps more confident in doing so.

There is a growing perception in the field that students develop better financial understanding, skills and habits not only through talking to parents and observing their behaviour, or simply by receiving financial education lessons in class, but especially via personal experiences and learning by doing. This is also an essential element of the SchoolBanks implemented by CYFI and its network partners.

Another interesting result of PISA is linked to the socio-economic background of the student. Socio-economically advantaged students score 89 points higher than disadvantaged students, on average across the OECD, which is an equivalent to more than one PISA proficiency level. Even after looking at students with similar math and reading scores, disadvantaged students from poorer families are about twice as likely as advantaged students to be low performers in financial literacy. These findings support once again CYFI's focus to integrate financial education in the formal school curriculum across the board, in order to tackle those socio-economic differences early on.

The results of the 2015 PISA assessments could have implications on a series of initiatives to be led in the following years:

-The importance of impact evaluations of financial education initiatives in and outside of school
-The need of providing young people with safe opportunities to learn by experience and by using basic financial products;
-The need to target parents with financial education initiatives at the same time as young people;
-The necessity of addressing the needs of low-performing and economically disadvantaged students;
-The importance of providing equal opportunities for learning to boys and girls;
-And finally, the imperative of integrating financial education into the school curriculum and providing effective and scalable teacher training.

Detailed results, country overviews and more data can be found in PISA 2015 Results (Volume IV): Students' Financial Literacy.

We encourage our network partners from various sectors to look into these results, to learn from the experience of other countries as well in the design and implementation of financial education programs for children in their countries. CYFI can provide support and guidance in this effort. You can follow the conversation on Twitter: #OECDPISA, and INFE-OECD


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CYFI and EFSE DF publish joint study on financial behaviour and knowledge of youth in South-Eastern Europe

CYFI and the Development Facility of the European Fund for Southeast Europe (EFSE DF) have published the final report of the study about financial behaviour and knowledge of young people in 7 countries of South-Eastern Europe (Albania, Croatia, Kosovo, Macedonia, Moldova, Montenegro and Serbia). 

Financed by EFSE DF, the study was conducted in the second quarter of 2016 and included in-depth focus groups and interviews with children and youth between 10 and 24 years old, as well as wide quantitative study of more than 2,000 children and youth people across 7 countries.

The study has showed that the level of financial literacy of youth is quite low, mainly related to a low understanding of traditional products, and the fact that the main sources of information and understanding of finances are derived from family and household experiences.

In the region as a whole, children and young people reported a positive saving behaviour. Having a piggy bank and using it as the primary source for saving money was the most popular way of saving across the region.

The study also revealed the experience of children and youth with various financial products, and some positive effects have been noticed in the results. Youth that have personal experience with owning and using their own bank account was found to be stronger with money management and saving habits, showed better perceptions of the importance of savings, and had deeper knowledge about financial products and formal financial education. The full report can be accessed here.

CYFI would like to thank the representatives of the Central Bank of Montenegro, Association of Serbian Banks, Ministry of Education and Science of Serbia, Institute of Educational Sciences of Moldova, Centre for Conflict Resolution – Macedonia for supporting the organization of data collection for the study. We would also like to thank Bank of Albania, National Bank of the Republic of Macedonia, Central Bank of Montenegro, Central Bank of the Republic of Kosovo, National Bank of Serbia and the National Bank of Moldova for their contributions and support.

For more information about the methodological setup of the study and for dissemination of the results, please contact CYFI Secretariat for further support.

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Child-friendly Product Development Workshop hosted in Malawi

​ CYFI, in cooperation with the hosting partner the Reserve Bank of Malawi, organized a Product Development Workshop for financial institutions in Malawi, that took place on 12th and 13th April in Blantyre, Malawi. 

The workshop had attendance and delegates from the major commercial banks, as well as the deposit-taking microfinance institution. In addition, the workshop was joined by officials from the Reserve Bank of Malawi who provided input and feedback from the viewpoint of the financial sector regulator. The workshop was moderated by CYFI experts, and covered topics such as the importance of financial inclusion for young people, needs and wants of youth, product design and marketing channels, and other aspects related to the development of savings and current accounts for children and youth in Malawi.

The workshop provided a platform to start discussions on the importance of financial education and financial inclusion of young people in Malawi, and to guide the local financial institutions in the process of developing child and youth-friendly banking products. The two-day workshop served as a space to exchange best practices and experiences, and present case studies that were achieved across the world, and especially within the Africa and SADC regions. 

At the end of the workshop, one of the participants stated "we recommend a shift on the legal perspective, and our institution can be one of the key drivers of the policy change", and another stated "if we can support and take youth seriously, the sky is the limit". The participants' evaluation of the workshop received the score of 4.5 and above on many topics, such as the presentation of topics, the usefulness of the presentations as future reference, and knowledgeability and responsiveness of the trainers.

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Financial Education + Life Skills = Girl Power

Adolescent girls are one of the world's most economically vulnerable groups. Compared to boys their age, they frequently have limited opportunities to gain the education, knowledge, resources, and skills that can lead to economic advancement.

Girls do not only need knowledge, skills, and a responsible attitude to manage money in a smart way; to be fully empowered, they also need to increase their self-confidence to support their ambitions. That is why CYFI partner, Aflatoun International, collaborates with Plan International and Credit Suisse's Financial Education Girls Program to improve the financial knowledge and life skills of approximately 100,000 girls in Brazil, China, India and Rwanda. CYFI contributes to and supports the research agenda of the program through the Credit Suisse Financial Education for Girls Advisory Group.

In addition to the program implementation, the partnership carries out research on the effectiveness of financial education for adolescent girls. The results of a recent literature review shows that the most promising financial education programs combine both social and financial elements. So in order to be most effective, financial education programs targeting adolescent girls should also include non-economic elements, such as life skills, interpersonal networking, communication, personality development as well as sexual and reproductive health education.

Research findings are increasingly available about the effectiveness of financial education. However, many questions remain. One of these questions is how to best involve communities in financial education programs. This is easier said than done. Financial education and life skills programs are recommended to encourage communities to engage in conversations about economic empowerment of girls, challenging harmful biases and replacing them with behaviours that foster inclusive and equitable education and labor markets for girls and boys. Ongoing research looks at the contextual factors – including social norms around gender - that financial education and life skills training programs need to understand and address. The program intends to publish the initial results of this country level research in the summer of 2017 so stay tuned!

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Interactive forum on independent teen bank accounts in Kenya on 8 March 2017

CARE Kenya is collaboration with Child & Youth Finance International (CYFI) organized a breakfast meeting around the issue of access of young Kenyans to independent bank accounts before the age of 18. The main focus of the meeting was to discuss the barriers, challenges, regulatory framework and recommendations that should be addressed to facilitate the development of adolescent friendly accounts by financial service providers in Kenya, and form a core group of stakeholders that will continue working on this issue.

CARE Kenya particularly advocates for more independency in opening and operating the bank accounts for adolescents between 15 and 18 years old. This particular age group was chosen due to the fact that Article 56 (2) of Kenya's Employment Act allows employment of children from the ages of 13-16 years for light work, and define those of 16-18 as employable. So while adolescents can be engaged in various forms of income generating activities, their possibility of owning an independent bank account is still quite limited according to the national regulation.

The forum brought together over 40 representatives of civil society, government, humanitarian agencies, financial service providers and umbrella organizations to discuss the issue. Representatives from CARE Kenya, CYFI, UNHCR, Child Savings Kenya and Postbank Kenya presented their findings and evidence about the importance of youth financial inclusion and access to formal savings, and participated in an interactive panel. The forum outlined several challenges and many opportunities in the area, and CARE Kenya will lead the follow up to continue consulting and engaging various stakeholders and policy makers on the topic.You can keep updated about the initiative by following the hashtag #TeenAccountKenya2017. 

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Leading The Way Towards Safer Payments for Children

​Child & Youth Finance International (CYFI) and Mastercard are launching a groundbreaking guide on banking and payment products for minors. Unique in its approach, the 'Safer Payment Products for Minors' guide identifies recommended practices on how Financial Service Providers (FSPs) can develop age-appropriate payment products for minors; promoting responsible spending and financial decision-making whilst incorporating functionalities that allow for parental guidance towards a minor's financial autonomy.

At a time when governments, the private sector and civil society are doubling down on their efforts to build a more inclusive society, these new guidelines ensure the needs and safety of the next generation are part of the process. Financial, digital and gender inclusion are crucial elements to build a stable world in which everyone gets the chance to fulfill its potential. Minors are the foundation of tomorrow's society and need to be brought into the financial mainstream in a responsible manner.

Developed for national and international financial institutions, the guide is intended to help decision makers and product owners understand the responsibilities, needs and risks associated with this market.

In addition to the goal of supporting the creation of safe and appropriate products for minors, the guide seeks to foster dialogue between parent and child. In this way both Financial Service Providers and parents can guide minors towards financial inclusion, autonomy and responsibility.

Walt Macnee, Vice Chairman Mastercard says: "Today's minors are the adults of tomorrow. As they grow up, we need to ensure that they are prepared to fully participate in the formal and increasingly digital economy. By ensuring that the tools and products that they are given are age-appropriate, we contribute to that preparation."

Recognizing that the varying functional and supervisory requirements of financial products for minors vary depending on the age and development of young people, the paper advocates for an end objective of empowering minors to fully manage their own payment products and money.

The guide was created by Mastercard, Child & Youth Finance International (CYFI), ParentPay, nimbl and Mirador Digital, with contributions from a range of organizations in the financial sector.

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CYFI and UNCDF launch the “Bank the Youth” Campaign in 7 African countries!

On March 27th, Child and Youth Finance International (CYFI), in partnership with the United Nations Capital Development Fund (UNCDF), are officially launching the 'Bank the Youth' Campaign. The aim of this Campaign is to overcome the barriers to financial inclusion for young people and increase their exposure to Child and Youth Friendly banking products throughout the world. 

The Campaign launch consists of several events in seven African countries: Benin, Burkina Faso, DRC, Madagascar, Senegal, Tanzania and Uganda. Representatives from governments, UNCDF, Financial Services Providers (FSPs), Youth Serving Organizations (YSOs), as well as youth themselves, will actively participate in the launch of the Campaign throughout Global Money Week (March 27th – April 2nd). 


Global Money Week was selected as the optimal time to launch the Campaign, since this year's GMW slogan 'Learn, Save, Earn' is profoundly related to the objective of the 'Bank the Youth' Campaign. In fact, education, clever  savings habits and entrepreneurial training can all enhance the financial awareness and economic opportunities of children and youth in all parts of the world. 


Why do we need to 'Bank the Youth'?

The Campaign was initiated because young people, especially those in Least Developed Countries (LDCs), face many barriers in accessing Child and Youth Friendly financial services. Some of these barriers include legal and regulatory restrictions to opening an account in their name, inappropriate and inaccessible products and services to meet their financial needs and low financial capability amongst a burgeoning youth population. 

These barriers can prevent young people from realizing their full economic potential. 'Bank the Youth' is indeed an advocacy campaign that promotes smart policies for youth financial access while facilitating greater opportunities for economic empowerment and youth development. These aspects are at the core of CYFI's model of economic citizenship, whose objective is to achieve sustainable economic and financial well-being, a reduction in poverty and greater respect for rights of self and others for children and youth through the attainment of financial inclusion and Economic Citizenship Education.

Beginning in 2017 with nine pilot countries in Africa (Benin, Burkina Faso, DRC, Madagascar, Malawi, Mozambique, Senegal, Uganda, and Tanzania), 'Bank the Youth' will coordinate efforts among numerous stakeholders in country to advance best practices in financial inclusion and education for youth. All participants are encouraged to take part in GMW and World's Savings Day's celebrations. After the launch during GMW, more members will be recruited as Impact Champions for the Campaign. Topics will be discussed via webinars and social media on a monthly basis related to financial inclusion both at the country and the international level. The target is to recruit at least 200 Campaign members by the end of 2017. 

Stay up- to-date with the latest news regarding the Campaign through the various the UNCDF, CYFI and Global Money Week social media channels!

Follow @UNCDF, @ChildFinance, @GlobalMoneyWeek, and @UNCDFYouthStart on Twitter and check hashtags  #BankTheYouth, #BTYImpactChampions, #GMW2017 #financialinclusion, #financialinclusion4youth, #Youthfinance, #GlobalMoneyWeek, #LearnSaveEarn, #youthdevelopment.


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CYFI took part in FINFIN 2017 in Moscow in February 2017

Child & Youth Finance International (CYFI) took part in FINFIN 2017 Conference in Moscow, Russia on 16 February 2017. FINFIN is an annual international symposium, aiming to bring together financial institutions, governmental bodies, and expert community to exchange and share best practices and latest trends in the area of financial literacy and financial inclusion.

The Conference fosters an open dialog between market practitioners, government officials and researchers. It also provides an ideal environment to develop new initiatives that would ensure sustainable development of the industry, increase the availability and quality of financial services for the population, and promote financial literacy programs in order to improve the well-being of Russian citizens. 

The conference is traditionally organized by Russian Microfinance Centre and Citi Foundation, with the participation of representatives of the Bank of Russia and Ministry of Finance of Russian Federation, as well as international experts. The 2017 edition of FINFIN saw participation of many global stakeholders in the field, such as OECD, Central Bank of Portugal, UK Consumer Panel, CYFI and other representatives from CIS region and beyond. 

In 2017 CYFI contributed to the panel on the ways to improve financial literacy of Russian population, alongside the speakers from the Central Bank of Russia, Moscow State University, and various private sector initiatives. The wide consensus was reached that starting teaching children the basics of financial behaviour, such as saving, budgeting and spending, is essential from the first years of school. The role of the Ministry of Education in this process was defined as crucial by all participants of the panel. CYFI Regional Advisor Karina Avakyan shared the recent findings of financial education landscape for young people, emphasized the importance of active practicing of savings from the young age, and presented the recent publication by CYFI and World Savings Bank Institute (WSBI) on various Schoolbanking models.

On 15 February 2015 CYFI was also invited to take part in the informal roundtable, organized by the Russian Microfinance Centre (RMC) and Bank of Russia on the financial literacy programmes for SMMes and entrepreneurs, and their role in the overall financial literacy strategies and policies. CYFI representative shared some examples and best practices from CYFI network members and other countries in Europe.


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Queen Máxima joins Global Money Week celebration for youth

Child & Youth Finance International (CYFI) collaborated with leading partners in the Netherlands on an event taking place on 30 March 2017 to highlight the importance of financial inclusion for youth.

The 6th edition of "Global Money Week", celebrated in 135 countries worldwide, took place from 27 March - 2 April 2017. The Dutch Money Week,​​ "Week van het geld", is organized during the same period. Both events provide an excellent opportunity to raise awareness of the importance of financial education and financial inclusion by connecting children and youth from around the world.

This special joint Global Money Week celebration is organized by​​ CYFI in collaboration with​​ the Money Wise Platform (platform Wijzer in geldzaken), Aflatoun International and partners. Her Majesty Queen Máxima of the Netherlands, honorary chair of the Money Wise Platform, joined the celebration.

Linking with the important issue of providing child and youth-friendly services, Queen Máxima received the pioneering ​​document "Safer Payment Products for Minors – guiding minors towards financial autonomy," co-authored by CYFI and Mastercard in collaboration with partners. As the UN Secretary General's Special Advocate for Inclusive Finance for Development and honorary patron of the G20's Global Partnership for Financial Inclusion, Queen Máxima is a leading global voice advancing universal access to affordable, effective and safe financial services in order to strengthen human development, especially among the poor. In The Netherlands she supports financial inclusion particularly in the areas of financial literacy and financial education.

Moderated by renowned Dutch TV presenter and global traveler Floortje Dessing, the event included an interactive "Trip Around the World" connecting Dutch and international children and youth to share insights on what the Global Money Week theme "Learn. Save. Earn" means to young people in their country, and addressing the issue: does money make you happy? During various interactive workshops, school students focused on key themes such as saving and borrowing, digital payments, tools for entrepreneurs, and social and financial education.

In the afternoon, international stakeholders, including representatives of central bank and corporations joined a round table discussion on "Digital Finance and Consumer Protection Implications for Youth (digital natives)." Panelists discussed opportunities, challenges, risks and solutions related to digital financial inclusion of the young generation.

Official press release from the Royal House of the Netherlands can be found (in Dutch) here.

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Scaling and Sustaining Youth Financial Services within the Microfinance Sector

​There continue to be challenges in convincing financial institutions that there is a viable business case to be made for significantly investing in Child and Youth Friendly Banking Products the provision of services for young clients around the world.

CYFI presented on this topic at the European Microfinance Summit in Barcelona, Jan 26-27th, along with the Mastercard Foundation and other leading European microfinance institutions and associations. The purpose of the conference was to share innovations in digital finance, social protection , environmental stewardship, financial literacy and client outreach in the microfinance sector. 

Participants were introduced to the components of Child and Youth Friendly Banking and the insights gathered from CYFI's advocacy and youth product development work around the world. CYFI was the only organization presenting on financial products for under 18s and participants were interested in hearing about how they could better serve this important demographic. Using the CGAP Business Case Framework for youth financial services, participants explored many of the aspects that contribute to the business case for Child and Youth Friendly Products:

  • Market Level Levers (government regulation, market competition)
  • Institutional Levers (opportunity costs, institutional commitment/resilience, time frame)
  • Segment Specific Levers (urban vs. rural youth, in school vs. out of school, online vs. offline)
  • Profitability Drivers (marketing, product design, product delivery model and operational support)

Drawing on the 2015 European Microfinance Platform Publication, CYFI was able to show the results of a case study analysis demonstrating how youth financial services have a greater probability for scale and sustainability when they are offered to older youth in urban areas, within a strong, facilitative macroeconomic environment and with the dedicated support of the institution's Management Team and Board. 

Innovation solutions to mobile banking or e-learning, and adopting a critical minimum approach to tailored financial literacy, can also help boost scale and sustainability of these products and services.




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First phase of SchoolBank pilot conducted in Georgia


The National Bank of Georgia (NBG) and CYFI have collaboratited on promoting SchoolBank in Georgia since late 2015, when NBG presented the concept to all commercial banks in the country. Since then CYFI and NBG have developed a standard 14-hour financial education module, monitoring and evaluation system and conducted a teacher training on active learning methodologies. Currently NBG is working with educational authorities in Georgia to get SchoolBank module as an extra-curriculum class in Georgian schools.

The first commercial bank to join the SchoolBank pilot, with their own educational module as well as innovative financial product for children was Bank of Georgia. Bank of Georgia has launched a sCool card in September 2016. sCool Card is a socio-educational program for students, aimed to improve financial literacy of the younger generation and to instill financial culture among children.


Schooling on financial literacy

The Bank has developed a comprehensive training module - sCool Card Business School – the school of financial literacy. The module covers lots of information  from social, financial and essential livelihoods education. The training program includes 5-6 training courses on various topics, which are held in schools every two weeks. The University of Bank of Georgia developed the training program, together with child psychologists, and it was approved by the Ministry of Education and Science of Georgia. Pilot trainings were held from October to December 2016 in 10 schools in the capital city, Tbilisi. Recently, at the end of January 2017, the first 175 graduates of the Business sCool Card were awarded certificates and souvenirs by the Bank.


Moreover, the Bank has distributed more than 100 000 debit sCool cards in Tbilisi, which also provide students with free public transportation. For 2017, the Bank is looking at further developing the educational module, strengthening the savings component of the programme, and expand the programme to other regions of the country.

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