Currently 12.6% of youth around the world are unemployed. At the rampant rate that unemployment is growing, 600 million jobs need to be created over the next 10 years to support the number of youth who are entering the workforce daily. Youth unemployment is not only detrimental to the national economy but to the youth themselves by affecting their sense of dignity and self-confidence by limiting their contribution to and full participation in their community.
Micro finance, big opportunities
The microfinance industry is responding to this urgent crisis by developing innovative ways to extend integrated microfinance services (savings, loans and cash transfers) and non-financial services (financial literacy, health education, business training) to the youth in an attractive and cost-effective manner. Microfinance providers are hoping to directly address the crisis of youth unemployment through the youth themselves - by boosting youth-led business creation and enabling self-employment.
Institutions such as Uganda Finance Trust and the Bank of Katmandu, part of the YouthStart and YouthSave Consortium respectively, along with Banco Adopen in the Domincan Republic and Fonkoze in Haiti, have each introduced youth savings products that have enjoyed encouraging results and provided evidence on the elusive business case for youth financial services.
The recent Microcredit Summit was held in Mexico on September 3-5 and was attended by individuals and institutions eager to share how they were expanding the reach of appropriate and affordable financial services to millions of households living in poverty. Microfinance has taken various forms throughout the world and remains an important tool for economic development and community well-being - providing the financial means to stimulate the enterprise growth that brings much needed income and employment for individuals from all regions and backgrounds.
The Microcredit Summit Campaign (MCS) (@MicroCredSummit) has set the ambitious goal of reaching 100 million poor households with microcredit services by the end of the 2015. Recently they have made a joint commitment with Child and Youth Finance International (CYFI) to ensure that 10 million children and youth are reached by appropriate financial services by the end of 2015. MCS and CYFI’s joint commitment takes advantage of the combined momentum of the 2 international campaigns to maximize outreach to young clients through the microfinance industry. For the full outcomes of the 17th Microcredit Summit, and to see how they relate to youth financial services visit MCS’s blog 100 Million Ideas.
Youth Opportunities and Innovation Calendar:
Innovations in youth microfinance were in the spotlight this week during the Youth Economic Opportunities Conference (#YouthEO) in Washington DC. CYFI engaged with other practitioners during an action packed agenda with sessions on scaling up youth savings products, how microfinance can break down barriers for youth entrepreneurs and how microfinance providers can best utilize new technologies to reach a wider range of youth clients.
The European Microfinance Platform (@e_MFP) has invited CYFI to play a leading role in their Youth Action Group for Financial Inclusion. This Action Group has recently released a call for case studies on how microfinance institutions have been able to achieve scale and sustainability through integrated financial and non-financial services for youth. These cases will form the basis of a new publication that will build on the lessons learned from the Action Group’s 2012 Publication and will provide the microfinance industry with a valuable resource for youth product development and stakeholder engagement.
CYFI is pleased to stand along with its many partners and stakeholders, such as MCS, Making Cents International and the eMFP, who are working hard to advance best practices in microfinance for youth clients. We strongly believe that microfinance institutions have a key role to play in allowing the Child and Youth Finance Movement to achieve its ambitious goals for youth financial inclusion and we fully stand behind our commitments to this important industry.