Reducing child poverty remains an important challenge facing national governments and international organizations. Through our effort to enhance the financial capabilities of young people throughout the world, Child and Youth Finance International (CYFI) is proud to endorse the recent Practical Action publication The Global Child Poverty Challenge: In Search of Solutions, which tackles the root causes of child poverty while providing fresh insights on innovative solutions to enhancing the social and economic lives of young people.
CYFI has always believed that the pathway to poverty reduction begins through collective action, allowing children to acquire foundational skills, develop their confidence as change-makers, build a solid asset base and secure future livelihoods as full economic citizens. For this reason, both this publication, and the Global Coalition to End Child Poverty, are in line with CYFI’s effort to empower all children and youth around the world by increasing their financial capability, enhancing their awareness of social and economic rights and improving their access to quality education and Child and Youth Friendly banking products.
Together with leading academics and experts in the field, CYFI has developed a model for economic citizenship for children and youth. The building blocks of empowerment and financial capability, that underpin the model of economic citizenship, are financial inclusion, along with financial, social and livelihoods education. From this model, CYFI has established the Child and Youth Friendly Banking Principles and the Economic Citizenship Education Learning Framework, providing a benchmark for curriculum and financial product developers throughout the world.
CYFI agrees with the publication’s premise that the elimination of child poverty cannot be left to the forces of economic growth alone. CYFI supports the publication’s emphasis on holistic solutions that combine efforts from policymakers and practitioners, ensuring that children are equipped with relevant skills at an early age, that they are given sufficient freedom to make social and financial choices, that their rights are recognized and upheld and that their economic potential is fulfilled.
Developing sustainable livelihoods
Karen Moore’s chapter in the publication reflects on the evolving approach of the MasterCard Foundation’s youth livelihoods programs in sub-Saharan Africa. It suggests that the combination of trainings on a range of market-relevant skills, along with access to economic opportunities and appropriate financial services, can foster secure economic futures for youth. CYFI supports this position and promotes the expansion of financial and livelihoods education at primary and secondary school levels in order for young people to familiarize themselves with financial institutions and develop entrepreneurial competencies that can sustain them and their families later in life.
Likewise, Mr. Richard Carothers’ chapter demonstrates how the microfinance sector can provide a safer and more beneficial learning experience for young workers employed in the businesses of their clients. CYFI supports the development of financial and employability skills in the teenage years, ensuring that young people understand the rights and responsibilities of both employers and employees and how they can secure a sustainable livelihoods through entrepreneurship and decent work.
Financial inclusion for empowerment
Regarding the value of financial inclusion and financial literacy, recent studies have shown that youth want to save and do so when given the opportunity. However, for most young people, the chances are still limited that they will actually receive the opportunity to save in a formal institution. According to the World Bank Global Findex, children aged 15 to 24 are between 10 to 50 percent less likely to have an account at a formal institution than adults.
The YouthSave project, described by Ms. Rani Deschpande chapter in the publication, not only shows that children (mostly aged 12-18) want to save in formal savings accounts but also that younger youth (under the age of 13) actually save more often than older youth. The results of this project showed that account uptake is influenced by a number of factors, such as the minimum age at which children can independently open a bank account, terms and conditions of the account, and sales incentives provided by financial institutions.
Financial institutions seem reluctant to offer financial products to children and youth because they believe youth are more difficult and expensive to bank. YouthSave implementing partners have found that the benefits of financially including youth include economic and financial well-being, financial knowledge and skills, health, and educational achievement. This has also been reinforced through CYFI’s own Research Landscape document which provides an overview of key academic findings related to financial inclusion and education for children and youth.
Creating youth-friendly products and services
Much progress has been made in recent years to expanding the reach of Child and Youth Friendly banking products for young people around the world. Practitioners should work together with policymakers to ensure any legal or regulatory barriers, such as age or identification requirements, are reduced to provide an environment more conducive to financial access for young people. At the same time, they should cooperate to ensure that consumer protection policies are in place that are tailored towards children and youth.
Likewise, civil society organizations, community centers and schools are uniquely positioned to reach young learners with innovative and captivating educational content that builds foundational skills for financial capability, active citizenship, and sustainable livelihoods. These practitioners should work actively with policymakers to ensure that financial, social and livelihoods educational content is integrated into national curricula so that a greater number of young people can be reached in a systematic and sustainable manner.
CYFI believes that the Global Poverty Challenge publication provides a valuable resource for both practitioners and policy makers eager to solve the issue of child poverty through financial inclusion and education that enhances financial capability and economic empowerment.