Africa SME Finance Forum

In May 2018, CYFI's Co-Director, Lubna Shaban, participated at the Africa SME Finance Forum in Nairobi, Kenya by speaking on the panel discussion, 'Disrupting Systems: Financing Africa's Youth Entrepreneurs'. 

Lubna and other panelists highlighted the need for the financial sector, with the support of policymakers, to serve youth entrepreneurs through the provision of tailor-made financial products and services that can help them grow their businesses. Lubna also highlighted the need for different ecosystem actors to collaborate and coordinate their efforts in serving this important segment.

The session which took place was chaired and coordinated by The Mastercard Foundation.

The SME Finance Forum, managed by the IFC, works to expand access to finance for SMEs. The Forum brings together financial institutions, technology companies, and development finance institutions, driving the growth of SMEs globally.

A summary of the event can be found here

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Cryptocurrencies: A Wise Investment?

Here at Children and Youth Finance International (CYFI), we see that the key to fighting poverty is for people to learn how to manage and handle money, to have the confidence, knowledge and capability to spend and earn responsibly, ensuring good financial health. This is particularly important for children and youth, so that they can make correct financial decisions from the start.

Good financial health involves more than controlling daily transactions. It is important to own investments as they provide long-term returns and savings that can cover unexpected expenses.

"Saving to cover unexpected expenses" sounds clear (and boringly necessary), but what about investments?

Nowadays, when thinking about investments, cryptocurrencies and their high return in the last years immediately come to mind. There are many stories of people who got rich quickly by betting on this novelty. Stories that encourage more and more people to enter this market. These stories are particularly appealing to a group of the population which see an opportunity to quickly make big bucks with their little investment potential, are used to instantaneous results and are more willing to take risks: young people. Moreover, cryptocurrencies have the natural appeal of being novel and innovative, and a sense of urgency is created around them: if you wait too long, the opportunity will pass, many people will have made a lot of money, but not you.

Should you close this web page and immediately open a wallet to invest in cryptocurrencies?

No. Cryptocurrencies are not a good investment to ensure your financial health. For all of the people that have made it big with a short-term get rich scheme, there are hundreds that have crashed and burned following the same strategy. Good investments must have medium- and long-term returns and, above all, have the security that allows for financial planning around them. Cryptocurrencies do not have this characteristic. Although some cryptocurrencies have more than doubled their value in one month, a loss of almost half of their value in the same period has also been documented. In addition, because they have only been on the market for a short time, estimating their medium- and long-term behavior is pure guesswork. Their unpredictable character makes it impossible to compute investment in cryptocurrencies that would enable financial planning. Furthermore, many people seem to think that cryptocurrencies are safe. In theory, this is true as they are anonymous and at the basic level, nothing identifies you with what you hold. However, when one uses third party traders, personal information is exchanged thus leading to the potential for identity theft or outright theft of your digital currency if the company is hacked. Another key problem has less to do with the technology and more with the human use thereof. Cryptocurrencies make use of a personal key, essentially a unique identifier that allows the network to accept and make transactions on your account. This key should never be stored on a device connected to the internet and furthermore, it is recommended that whenever conducting a transaction a VPN should be used. Most people can barely create a password for their email address that is considered "safe" let alone do all of these things. We need only look to the half billion stolen from Japanese based Coincheck exchange last year for strong warnings.

Financial planning is a crucial concept here. Saving and investing every month may sound much less sexy than getting rich within six months by investing in a new technology people do not yet know or understand. It may seem less attractive (especially for young people) than cryptocurrencies, which disregard traditional financial governing bodies, such as governments and banks. However, financial planning is the only method of investment which guarantees consistent financial health in the long-run.

So how CAN you ensure long-term financial stability and financial health? Sorry to disappoint and perhaps sound like your grandfather or a public service announcement, but it requires planning and hard work and a long-term investment horizon.

How CYFI helps you

We know financial planning can be a long and arduous process, with many external barriers and difficult decisions along the way. That is why CYFI advocates with your government for Economic Citizenship Education and carries out different initiatives:

  • Global Money Week is an annual financial awareness campaign created to inspire children and young people to learn about money matters, livelihoods, and entrepreneurship;
  • Ye! Community connects young entrepreneurs around the world and links them to various resources to support the growth of their enterprises;
  • The Global Inclusion Awards 2018 recognize and honor those who achieve greatness in furthering the Economic Citizenship of children and youth.

In several initiatives we partner with other relevant players to increase our reach and impact:

  • CYFI Global Summit 2018, hosted by the Banking Association South Africa (BASA) together with CYFI, is the major global summit focusing on youth economic citizenship, entrepreneurship, financial education, and financial inclusion for children and youth;
  • SchoolBank aims to economically empowerment of children and youth by providing them with access to appropriate banking products, economic citizenship education and practical skills for using a bank account. Local banks offering Child &Youth friendly banking products are engaged with local schools, under the supervision of the Ministry of Education and Central bank regulators, to provide such products through the school system.

There are several ways to participate in the system change, our collaborative process to create large-scale change. CYFI acts on many fronts for this because we believe that children and youth are the next generation of changemakers. They are tomorrow's business leaders, politicians, parents, teachers. They unlock their potential when they believe in themselves.

We hope to inspire others to join us.

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CYFI’s Founder Ms. Jeroo Billimoria appointed Officer of the Order of Orange-Nassau

Jeroo Billimoria is appointed Officer of the Order of Orange-Nassau, April 2018

CYFI are thrilled to announce that on 26 April 2018, CYFI's Founder Ms. Jeroo Billimoria received a Royal Honor from the King of the Netherlands by being appointed Officer of the Order of Orange-Nassau.

The Order of Orange-Nassau (Orde van Oranje-Nassau) is a special high-ranking Dutch civilian order of chivalry awarded to persons who have committed outstanding service to society. As an Officer of the Order, Jeroo is now ranked among renowned Dutch politicians, artists and scientists.

Global Social Entrepreneur

This Honor recognizes Jeroo's contribution to global society, having established and led multiple international non-governmental organizations based in the Netherlands. Jeroo founded Child Helpline International (CHI) in 2003 with the intention of improving child protection systems by strengthening child helplines around the world. Today, CHI comprises a network of 180 helplines in 147 countries. Following CHI in 2005, Jeroo founded Aflatoun International to teach children about money to break the cycle of poverty. The Alfatoun campaign received the support of H.M. Queen Maxima of the Netherlands, and, in partnership with Nederlandsche Bank and Deloitte, reached 11 million people in 109 countries. In 2011, Jeroo founded her third organization, Child and Youth Finance International (CYFI), a global system change organization working with partners in over 150 countries to ensure financial inclusion and Economic Citizenship Education for young people worldwide. CYFI has reached 36 million young people under Jeroo's leadership, supporting 16,000 youth entrepreneurs through the Ye! Community initiative and reaching over 7 million children in their annual, Global Money Week.

International Impact

Jeroo is considered among the world's leading social entrepreneurs and is now working on her ninth entrepreneurial venture. In the last 15 years, Jeroo's three organizations have touched the lives of an estimated 200 million children globally. NGO Advisor recently ranked Aflatoun International, CYFI and CHI in the Top 500 NGOs World making Jeroo the only person globally to have three organization ranked in the top 100. With her organizations ranked at 26th, 32nd and 84th place (respectively), Jeroo's work is highly regarded across the non-profit network.

Not only is Jeroo a Skoll Awardee, she is also an Ashoka and Schwab Fellow. She was recognized for her innovation and leadership when she was awarded Union of Arab Banks award in 2015. Jeroo was ranked 3rd in the charity and non-profit category of Opzij's Top 100 Influential Women.

A Personal Achievement

Jeroo's appointment as Officer in the Order of Oranje-Nassau is made all the more remarkable as she is the only non-European to receive a royal honor amongst all the ranks this year, and by the fact that she moved to the Netherlands 15 years ago and managed to accomplish all that she did despite not knowing anyone except her husband.

Reflecting on the Honor, Jeroo said: 

"This is a remarkable honor I share with all of my colleagues across organizations, partners and supporters that have believed and shared our vision. With long standing strategic partners like Deloitte, Houthoff Buruma, Mastercard Foundation, Mastercard Corporation, McKinsey & Company, the players of the People's Postcode Lottery and the Zurich Foundation we have been able to accomplish all that we did and empower young people across the world to take the future into their own hands."

The CYFI team are proud of Jeroo's achievements and are looking forward to supporting her in her next venture. 

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Addressing the Persistent Problem of Youth Unemployment

Author : Emma Broholm

Since 2015 countries, organizations, and individuals, including Child & Youth Finance International (CYFI), have vowed to implement and follow the United Nation's 17 Sustainable Development Goals (SDGs). CYFI focuses on 8 SDGs specifically, including SDG 8 - decent work and economic growth - which is relevant for CYFI's Financial Inclusion Framework. It is worth noting that both CYFI and the SDGs focus on job growth for youth and with good reason. Across the world, 71 million young people between the ages of 15 and 24 are registered as unemployed. To clarify, ILO defines unemployment as someone without work, available for work and actively seeking work. Youth unemployment is a current and acute problem that unfortunately is often labeled as "too difficult to solve now". Worldwide youth unemployment is a problem too vast and too region specific to discuss here, therefore, this article will focus solely on youth unemployment in Sub-Saharan Africa and its causes and possible solutions.

Currently, 11.6 million young people are registered unemployed in Sub-Saharan Africa. There are multiple causes for this, first and foremost, lack of proper education. Millions of children do not acquire basic reading, writing and mathematics skills, however this is not the only problem. When children do have the opportunity, they do not receive a proper education, the emphasis being on proper. Most national curricula do not have the resources to focus on vocational subjects, including entrepreneurship education, or how to develop and properly use soft skills, such as research and communication skills. This prevents young people from discovering their unique talents and prevents them from acquiring the skills needed to find employment to suit their skillset. Linked to the lack of wholesome education, is the lack of proper funding. To implement an educational reform and to fund research and employment programs, extensive funding is needed. Between 2010 and 2014, the donor aid for education dropped by 14%. This led to a halt in the much-needed educational reform. Finally, attention should be paid to the current gender disparities in education. Worldwide, there are more than 61 million uneducated young girls, and of these women, approximately 29 million live in Sub-Saharan Africa. Despite the abundance of evidence that suggests educating girls leads to social, economic and health gains and reduce youth unemployment, this continues to be the case.

While the ever-growing problem of youth unemployment cannot be solved overnight, a few long-term solutions can be offered. The most obvious change is the provision of quality education, which is unfortunately easier said than done. The Equity Group Foundation, an initiative by Equity Bank Kenya, has begun to address the issue in Kenya. In collaboration with Mastercard, the Foundation started a financial education program – covering budgeting, savings, debt management, financial negotiations, and banking services. Furthermore, the Foundation launched an entrepreneurship-training program, offering training to young entrepreneurs to increase the entrepreneurs' practical business skills. To date, the program has mentored and supported over 11,500 youth, women and emerging entrepreneurs. In addition to these programs, educational reforms must also be implemented. The National Curriculum Development Centre (NCDC) of Uganda suggested that students must be taught how to be independent and use their personalized skillset to their advantage. The school curriculum should not solely focus on standardized subjects, but also on subjects that ensure that students are self-reliant and productive. This does not only apply to Uganda, but should extend into Sub-Saharan Africa and the entire world. Students, regardless of gender, should receive equal education that does not treat them as part of a system, but instead looks at individual skillsets, enabling them to differentiate themselves.

It can therefore be concluded that while solving the issue of youth unemployment cannot be done overnight, it can most certainly be addressed without falling back on the idea of it being "too difficult to solve now". Quality of education not only seems to be the biggest cause, but also the greatest solution for youth unemployment. Thus, a focus must be placed on offering proper education to young people, whether this is by way of changing the national curriculum or offering educational programs outside of the traditional school system. 

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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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Global Economic Citizenship: The Time is Now

Author : Kira Speer

Over the past year and a half we have witnessed the disassembling of historically strong democracies, illustrating a burgeoning populist sentiment across the world. Countries are breaking apart from greater trade or political unions with the belief that their newfound solitude will encourage greater economic and social prosperity. However, the solution to the many challenges of increased economic prosperity will not be found in a state of isolation. Rather, it will be found with greater inclusivity and the extension of financial services previously unavailable to a majority of people in developing countries.

Greater financial inclusion for children and youth in developing countries could be the answer to many of these countries' most dire social and economic issues. And, with the combination of rising global technology penetration and advances in Finance Technology (Fintech) which offers cheaper, more secure banking services, the time is now for financial inclusion and global economic citizenship.

The Informal Economy

A 2014 report from the World Bank reveals that 2 billion people in the world are unbanked, many of whom are operating in the 'informal economy'.

While this system serves its primary purpose as a way to engage in simple, hand-to-hand financial transactions, it lacks many safeguards which protect against during unpredictable events such as natural disasters or medical emergencies. Without inclusion within the formal financial system, these people do not have the opportunity to advance economically and will likely remain in their current financial position.

When excluded from formal banking, people do not have access to many of the benefits that services provide, such as savings accounts, lines of credit, or even a detailed ledger to more effectively manage money. These problems are especially pertinent for youth as they are 33% less likely to have a savings accounts than adults and 44% less likely to save in a formal institution, according to a UN Youth publication. Early introduction for children and youth to checking, savings, and even investment accounts is essential and would give them the opportunity to develop solid financial habits, save, and generate interest on their savings in the meantime.

However, key challenges towards financial inclusion remain:

1) Location: Many of the world's unbanked live in poverty in rural areas, often too far away to easily access traditional brick-and-mortar banks. Their geographical distance poses one of the most difficult challenges for increasing global economic citizenship and financial inclusivity. Because of their remote locations, banking services often do not reach rural populations, and poverty can be perpetuated for the poor as a result of their inability to access bank accounts, save or obtain credit.

2) Financial Education: Despite major advances in education in developing countries over the past few decades, financial literacy still poses a major obstacle to reaching sequestered populations. For children and youth, who are at the dawn of their academic and social educations, the extension of financial education will encourage the formation of good habits that will last the rest of their lives.

Without basic literacy, banks would be negligent to expect a full understanding of important documents such as the terms and conditions of customer to business contracts, liability waives, list of transactions, and tax forms to name a few. Additionally, without basic financial literacy it would be naive to believe that people would use a system that they don't have a basic understanding of.

Efforts like introducing financial education into core school curriculum set children up for sustainable success that will serve them well as they transition into more economically active, financially conscious adults.

3) Banking Risks: An additional challenge for companies hoping to expand their services to unbanked populations is security.

A digital financial platform with low-cybersecurity could be highly at risk, and increasingly financial service providers are viewing consumer protection and the implementation of digital security as an urgent issue. Cyber security is especially important for companies hoping to reach child and youth populations as improving their financial knowledge and experience of handling money could support security.

Looking forward

To effectively combat the location, literacy, and security challenges associated with the extension of financial services, financial service providers, businesses, and governments must be held responsible in revamping their existing policies and business structures to more effectively foster and regulate positive growth in the sector.

Collaborative action through global networks can help to encourage both service providers and governments to adjust their efforts towards a more inclusive, and more child-friendly, approach.

Role of Businesses and Financial Service Providers

As with any product, it is essential to keep the wants and needs of the customer at the core of its purpose. Looking forward, providers of financial services should position their products as youth-friendly by addressing basic requirements, including access, control, positive financial incentives, security, and economic citizenship education. These requirements, complemented with growing responsibilities as a child ages, will encourage positive financial habits and result in more financially responsible adults.

In return, financial service providers can expect to gain long-term, loyal customers. According to a MasterCard study only 10% of teens would consider changing their bank once their relationship is established. This loyalty is only heightened by the brand allegiance commonly associated with millennials, the largest target market of financial providers.

Role of Governments

As the economy develops and expands, it is important that governments take action to regulate growth. These actions will be paramount to the viable success of financial inclusivity. A range of principles have been identified as the global standard for safe banking for children and youth.

Some of these principles include:

-Availability and Accessibility: No minimum age to open or operate a bank account

-Maximum Control to Youth: Independent opening and ownership

-Positive Financial Incentive: No overdraft charges, interest rates that outweigh cost of opening account, no penalty for demand deposits/low penalties for term deposits

-Communication Strategies: Child tailored communication strategy, clear explanation to youth of rights/responsibilities

By upholding these principles and putting into place laws that can effectively foster them, governments will be supporting the economic success of their country. While some effects may be immediately evident such as an increased number of child and youth-appropriate bank accounts, the more positive, long-lasting results will be evident over time as the children and youth of today become adults. These adults will be equipped with both a practical and theoretical understanding of the financial tools available to them, and this knowledge lays the foundations of a more stable and sustainable economy.

Financial Technology (FinTech)

Along with a population of more financially literate adults, countries and companies alike are moving towards the adoption of financial technology (FinTech) services. FinTech, a rapidly growing sector of the financial industry, generates around $12 billion a year in profits, a number on track to experience exponential growth. In comparison to traditional banks, FinTech companies require less infrastructure and less specialized staff and therefore can provide comparable and far-reaching services at a fraction of the cost.

Research carried out by Pew Research Center in 2016 showed that in developing nations smartphone ownership rates had risen from 23% to 37% from 2013 to 2015. These numbers will only continue to climb as worldwide digitalization of products and services becomes more mainstream, making access to Fintech services easier.

In terms of making digital financial services safer, a new wave of financial innovation, called Blockchain, has the potential to make a great impact on digitized banking worldwide. According to a October 2017 report by the IFC, Blockchain could tackle many issues emerging markets face in regards to financial risk. Through its extensive, secure network and its detailed history of transactions, Blockchain has the ability to increase security, transparency, and cost efficiency.

The role that FinTech companies and services play will be the driving force in the lives of the children and youth today. As we witness a growing penetration of smart devices in daily life, companies and countries alike would be well-advised to create components of these services geared towards the younger generations. By doing so, they will be creating loyal users who will be a part of the population walking alongside them into the ever-changing future of formalized banking. FinTech, although young, will likely have a significant effect on these countries where the opportunity and need exists to reshape current market structure.

The Future of Economic Growth

There are many ways in which unbanked populations can be reached around the world, and the opportunity for economic prosperity drives the case for global economic citizenship. In addition to being financially included, increased access to financial education and the opportunity to create sustainable livelihoods will improve the lives of children and youth, their families and communities.

Despite their economic or political differences, governments, businesses, financial service providers from around the world must work together to achieve the common goal of poverty eradication and economic growth. Economic citizenship for children and youth will provide the most comprehensive and effective long-term approach to achieving empowerment and prosperity worldwide.

Kira Speer is a Financial Analyst at a Financial Consulting Firm in Mexico City, Mexico. Kira holds a dual-degree in International Business and Finance from the University of South Carolina.

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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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The Rise of Mobile Money: Enabling Children and Youth’s Access to Financial Services

This blog post was written by Opelo Matome, Network Advisory Services Intern.

As a follow-up to the previous post on the challenges and opportunities of FinTech, CYFI has recently taken stock of the latest trends and figures of the mobile money industry, highlighting the progress in the developing world and offering a set of recommended practices to help children and young people access mobile financial services easier and safer.

Mobile money and young people

We live in a digital age, where we constantly seek and consume information with just the click of a button or the tap of a screen. This digital revolution means that the production and use of cellular phones and other mobile devices is steadily sweeping its way across the globe. Herein lies a unique opportunity for people, especially young people, to use technologies such as smartphones to find and create solutions to challenges around access and use of appropriate financial products and services.

Mobile technology is particularly important when considering financial inclusion of children and young people. Two-thirds of the world's population has a mobile subscription; this fraction is projected to increase to three-quarters by 2020, with regional penetration rates ranging from 50% in Sub-Saharan Africa to 87% in Europe. Perhaps even more interesting is the fact that mobile phone penetration rates in developing countries are higher among youth (15-24yo) compared to rates among those who are 25 or older. This is why it is particularly important to engage this demographic and tailor FinTech and mobile banking solutions towards their specific needs.

The rise of global investment in FinTech suggests that the industry is expected to grow, thus has the potential to make a significant social impact. Furthermore, as smartphone usage and smartphone penetration increases, so does the opportunity to offer more complex FinTech solutions to the socio-economic challenges such as financial inclusion. This means that the market for mobile money and mobile banking technologies in the developing world is expanding, presenting a unique opportunity for financial service providers (FSPs) to develop youth friendly savings products and other financial services using mobile applications.

The future of mobile money

So, what about smartphones? Having a cellphone allows you to access basic mobile banking and mobile payment tools, tools that have previously been very successful in increasing access and use of banking products and services. However, smartphones open up a plethora of new opportunities, mainly the use of applications with multiple features and functions.

According to the Groupe Spéciale Mobile Association (GSMA), leaders in research in the mobile telecommunications industry, smartphones account for over half the world's mobile connections. In 2016, smartphone penetration was 65% in MEDC countries. By 2020, the developing world is expected to add 1.6 billion smartphone connections to the mobile eco-system, and smartphone adoption is expected to increase to 62%, with China, India and Indonesia leading the pack. In the next two years, Smartphone adoption in Latin America and MENA is expected to reach 70% and 62%, respectively. We see a similar upward trend in Sub-Saharan Africa, especially amongst young people. Currently, 41% of 18-34 year olds in Sub-Saharan Africa own a smart phone, with "Younger, Educated and English Speaking Africans" noted as most likely to own a smartphone. Furthermore, in a recent report, McKinsey Global Institute projects that smartphone penetration in Sub-Saharan Africa will reach 50% by 2020.[1] In South-East Asia, technology is already being used as a way to facilitate mobile banking activities with between 70% and 76% of millennials in Thailand, Singapore and Malaysia receiving some form of their pay via an app or functionality on their mobile phone.

Many have already been quick to catch onto this trend, with startups from Australia to London to Kenya creating smartphone applications that teach financial education and promote financial inclusion for children and youth. Other studies have shown that texted reminders increased savings in Bolivia, Peru, and the Philippines by up to 16 percent.

Making mobile services accessible

Even though a range of mobile financial services are available, practitioners and service providers canhelp young people to more easily meet the requirements for accessing financial services; ensure a client-centered needs-based design of the financial service; encourage consumer confidence in product usage through education; reduce physical safety risks for youth taking into account quality, accessibility and stability of services. Furthermore, using an already established network of mobile banking agents e.g. small kiosks, grocery stores, pharmacies and post offices can help increase young people's access to money and savings.

[1] McKinsey Global Institute. (2016) "Lions on the Move."

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OECD Financial Education Project in CIS countries – Conference and Project Workshops in Belarus

CYFI Senior Advisor Karina Avakyan participated in the first high-level conference of the new OECD/INFE project on Financial Education in the Commonwealth of Independent States (CIS)/Eurasia, co-hosted by the National Bank of the Republic of Belarus. 

The technical assistance project is supported by the Ministry of Finance of Russian Federation, and is aimed to provide dedicated guidance and technical support for the design, implementation and review of evidence-based financial education strategies and policies in six Eurasian economies – Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyz Republic and Tajikistan. The high-level conference saw the participation of country representatives from all 6 participating countries, Russian Federation, as well as INFE network members, experts and partners.

In a panel dedicated to youth financial education, alongside INFE members and country representatives from the Netherlands, Hong Kong, Armenia and Russia, CYFI representative shared an overview of best practices and examples of financial education being introduced in schools, as well as discussed the importance and pros and cons of various curriculum integration models. Addressing youth needs was determined as one of the priorities for the project, alongside financial literacy of migrants, data collection, and development, implementation and revision of the national financial education strategies.

The second day of the event included practical workshops aimed to support project countries and their national stakeholders on the road to achieve the project objectives, and were focused on the importance of data collection, monitoring and evaluation, and national strategies.

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It’s Time to Act: Children and Youth Can Shape The Sustainable Development Agenda

This week, the representatives of governments, civil society organisations and businesses will meet in New York for the 72nd United Nations General Assembly (UNGA) under the theme "Focusing on people: striving for peace and a decent life for all on a sustainable planet". The event presents a host of opportunities to connect, discuss and debate on social, humanitarian and cultural challenges facing the world. 

The UNGA follows the UN High-Level Political Forum (HLPF) held in July which aimed at creating a monitoring and review network for the implementation of the Sustainable Development Goals (SDGs).

Working to achieve the SGDs

CYFI firmly believes that financial inclusion and Economic Citizenship Education (ECE) for children and youth is integral to the achievement of many of the SDGs, especially in SDG 1 (Poverty Reduction) and 5 (Gender Empowerment), which were among the focus SDGs of the 2017 HLPF. 

Together, financial inclusion and financial education help children and youth to accumulate savings and develop responsible financial behaviours, qualities that are useful to reducing the impact of economic shocks. Savings can be used at the microeconomic level, to provide a solid asset base for the household, and at the macroeconomic level, rendering more stability to the overall economy. Furthermore, with the skills acquired through social and livelihoods education, children and youth learn to diversify their income and draw on social networks, thus lowering the impact of fluctuations in household income. In addition, financial access and developing financial capabilities for young women and girls increases social and economic empowerment, allowing them to take advantage of greater economic opportunities alongside their male counterparts. In turn, empowering women to have greater control over their finances advances the goal of gender equality.

CYFI is constantly promoting economic citizenship for children and youth within the Sustainable Development Agenda, recognizing that young people are a decisive factor in achieving these ambitious goals. CYFI stands alongside other organizations, such as Restless Development, Save the Children and the Commonwealth Secretariat, arguing that children and youth deserve the opportunity to be involved in helping, guiding and monitoring the realization of the SDGs goals.

How UNGA representatives can commit to youth empowerment

Since the introduction of the SDGs in 2015, progress has been made by a number of countries to end all forms of poverty, reduce inequality and tackle climate change by 2030. There are many initiatives that have led to improvements in the various SDGs, but the commitment of governments must continue if the goals of the Sustainable Development Agenda are to be achieved by 2030. Governments have the responsibility to the next generation to provide greater quality education, entrepreneurial support and an environment conducive to Child and Youth Friendly Banking.

Moreover, CYFI calls on government authorities assembled at the UNGA to:

· Create or continue cooperation through national multi-stakeholder platforms (government, private, public and academic sector) that actively engages the voices of youth.

· Develop and implement national strategies that combine financial access, and financial, social, and livelihoods educational elements with a clear focus on the unique needs of children and youth.

· Identify legal and regulatory barriers that are preventing children and youth from accessing financial services and work on removing them.

· Invest significantly in school banking models that use the public school system to bring together Child and Youth Friendly banking products and ECE related programming, in partnership with financial service providers and qualified educators.

· Invest more in the design and delivery of ECE programs that are targeted for pre-school and primary school children, in line with research findings that emphasize the importance of developing positive financial behaviors at an early age.

· Monitor and evaluate the effectiveness of national financial inclusion and education initiatives, collecting data on key indicators on economic citizenship for children and youth.

The need to invest in specific policies and programmes targeting vulnerable children and youth is clear and CYFI remains committed to promoting Child and Youth Friendly Banking and quality ECE in all parts of the world. Government authorities, financial institutions, and civil society organizations are key players in the effort to advance the United Nations Sustainable Development Agenda and should consider the benefits of integrated financial inclusion and ECE to reach these important SDGs. The UNGA provides that opportunity to translate public commitments into tangible actions.

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Unleashing the Potential of Fintech: Scaling Up the Financial Inclusion of Children and Youth

This blog post was written by Avigail Kohn, Communications Intern, and Roberto Formicone, Thought Leadership and Consultancy Intern.

Since 2010, the rise of Financial Technology (otherwise known as Fintech) has irrevocably changed the landscape of finance. The term Fintech is used to describe the industry of companies who use technology (primarily internet and mobile phones) to make financial systems and their delivery more efficient. These companies tend to be start-ups that make it easier for people to invest, save and make payments.

Fintech has been lauded by many as the key to financial inclusion in least developed countries (LDCs), especially for youth. World Bank data from 2014 shows that 2 billion people in the world are unbanked: around half a million people less than in 2011. The reason is that online financial services have increased the accessibility and ease for people to engage with banking. ​ As such, digital financial services are seen as a crucial element in reducing poverty and banking the unbanked.

However, despite the benefits of Fintech, there are still many obstacles to achieving financial inclusion for young people. This blogpost will examine the opportunities and challenges that Fintech faces in appealing to this segment of the market, and assess its actual impact on child and youth finance.

Legal and regulatory barriers

Financial education and access are most beneficial at a young age, because it is much harder for older people to change ingrained financial habits. However, youth can face legal and regulatory barriers that impede their ability to engage with financial services. Many banks and telecoms have minimum age and ID requirements to open accounts or own mobile phones. This prevents children and youth from engaging in financial transactions and developing financially savvy behaviours.

However, some Fintechs are working to tackle these barriers. Certain companies accept school certification instead of formal ID, making it easier for children to set up accounts. Moreover, while some regulations limit Fintechs, they are only partially subject to the regulatory constraints applied to conventional banks, meaning they can be more flexible in their approach to youth.

Poor Infrastructure

Fintechs require fewer highly specialized staff and barely any physical infrastructure. This means that costs imposed by higher regulations will still account for less than the overall costs for regular banks, suggesting that Fintechs will be cheaper for youth in developing (and developed) countries. While Fintech itself may not require much infrastructure, the infrastructure of developing countries themselves poses an issue for youth. In many LDCs, it is hard to access internet or mobile financial solutions due to poor facilities such as faulty electricity, bad mobile network coverage and lack of mobile money agent penetration. Most youth find their electricity/mobile network service too unreliable to send basic texts - therefore, it is hard for them to trust mobile services with valuable goods such as money. Trust with Fintech in general is also an issue: youth feel less comfortable using Fintech because there is a lack of familiarity and security; they may prefer to transact in cash or face to face to limit financial fraud.

While some may regard mobile financial services with suspicion, for others it has created an opportunity to reduce the rate of money insecurity in their homes. In places where theft is rampant, keeping money stored as cash in houses is unsafe. Making financial services more accessible and wide-reaching through Fintech means that youth from low income areas can protect their income securely.

Limited access to mobiles

There is a steep upward trend towards using mobile phones for banking in developing nations. Research done by Pew Research Center in 2016 showed that smartphone ownership rates in emerging and developing nations have risen from 23% in 2013 to 37% in 2015. This means more youth can be exposed to the benefits of Fintech.

However, low income youth still face several limitations. Primarily, cost prevents youth from buying or using a phone. Furthermore, the apparent increase in youth mobile phone usage may be a result of many people sharing one phone (using different SIM cards). Youth may have access to a mobile device, but will have privacy and security complications when dealing with online financial services. Gender and age structures add another challenge: if a family has enough money to buy a phone, it is more likely adults will get monopoly over it. Young females especially have trouble accessing phones when they reach puberty, as conservative attitudes create the assumption that phones lead to 'inappropriate behaviour.'

As more people start seeing the benefits of mobile financial services, Fintechs can harness their influence to impact phone prices and provision, hopefully securing more attainable phone access for all.

Lack of data

Data collection is a critical aspect to many Fintech business models, whether it is retail or investment banking. Companies that are able to derive business insights from financial services data can identify and maximize new opportunities and reduce risk.

In order to create financial services that suit the needs of unbanked youth, Fintechs need a certain amount of information on this target demographic. However, the lack of data on youth mobile banking needs and usage presents a challenge to the creation of appropriate and sustainable products. In addition, the gathering of child and youth specific data becomes more difficult due to privacy issues. This is compounded by a limited digital footprint in developing countries due to poor mobile and broadband infrastructure. A solution to these problems could be the creation of apps which collect user data in developing countries. For example, existing apps such as SERV'D or UBER can be seen as successful examples of data collection tools.

Lack of youth protection

One of Fintech's major challenges is to create innovative financial solutions that improve the conditions of users throughout the world, while at the same time respecting consumer protection, especially for youth. There are many opportunities for companies to develop products that are both technologically advanced and safe for young people to use daily. One such example is nimbl, a simple, smart, and safe application that helps children aged 8 to 18 learn how to save, spend and budget their money responsibly. Thanks to the nimbl app, parents can receive alerts enabling them to track their child's spending in rela time .

Fintech should be able to offer solutions to increase cost efficiency, meet the complex needs of consumers and produce value for the economy. To achieve this, adequate policies on access to technology, standardization of data, security, personal data management and protection must be put into practice. Moreover, Fintech should be considered as an incubator for innovation that creates opportunity for those who do not have significant financial resources. As a result, people in developing countries, especially children and youth, have the potential to benefit greatly from advances in innovative financial technologies.

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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

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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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