Jamie M. Zimmerman and Julia Arnold
Hope or Hype?
Five Obstacles to Mobile Money
Innovations for Youth Financial Services
Seen as a critical enabler of young people’s economic empowerment, youth finan-
cial inclusion has galvanized support and activity all over the world, garnering
attention from policymakers, the financial sector, practitioners, and researchers. En
al mismo tiempo, tecnología, particularly the mobile phone, is increasingly seen as a
potential tool to bridge gaps in information, products, and services to poor people
worldwide. Services like M-PESA in Kenya have sparked interest and attention
around the mobile phone’s potential to accelerate the pace toward global financial
inclusion. As a result, there is growing consensus that mobile solutions are an
important, effective development strategy.
Mobile-enabled solutions to financial access and capability bring hope to those
working in youth financial inclusion at a time when existing tools are proving less
effective and sustainable than envisioned. Classroom-based financial education
has not catalyzed changes in behavior effectively, nor have we yet found a way to
make youth financial services sustainable.1 Inspired by many of the mobile finan-
cial service successes for adults, including mobile wallets, mobile payments, y
account access for deposits and withdrawals, the youth financial inclusion field
sees a way forward. Teóricamente, mobile solutions should allow the field to
leapfrog many existing hurdles to financial access and experiment with delivery
Jamie M. Zimmerman is Director of the Global Assets Project at the New America
Base, a nonpartisan think tank based in Washington, CORRIENTE CONTINUA., and a member of
the YouthSave Consortium. YouthSave is an initiative aimed at developing and test-
ing savings accounts for low-income youth in developing countries.
Julia Arnold is a Research Fellow with the Global Assets Project at New America
Base. Julia has a background in mobile financial services for low-income
women and has published original research that examines whether or not the mobile
phone is a barrier to women’s access to financial services.
This article summarizes findings also presented in the 2013 Global Assets Project pol-
icy brief, “Accelerating Access: The Movement Toward Mobile Solutions to Youth
Financial Inclusion” by Zimmerman et al., published by the New America
Base.
© 2013 Jamie M. Zimmerman and Julia Arnold
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canales, marketing, behavioral nudges, and other financial capability-enhancing
activities.
Applying mobile solutions to goals for youth financial access has particular
appeal, as young people are known to be early adopters of and innovators with new
tecnología. Experience has shown that children and youth do not even need fomal
training to be able to pick up and use a mobile phone.2 By building on this ease
with technology, access to financial services early in their lives may maximize the
positive economic, social, and behavioral impact on youth.3 Accumulating assets
early can help mitigate the vulnerability and volatility that define the lives of low-
income individuals and households. De hecho, youth may even influence older
household and community members by demonstrating the benefits of formal
financial services.
If youth (a) generally have access to mobile phones, (b) are early adopters and
fast learners of new technology, y (C) develop their stickiest behaviors (es decir., those
most resistant to change) early in life, then mobile solutions should be an acceler-
ator of financial capability and access among the youth demographic, even more
so than for their adult counterparts.
Promise and excitement aside, sin embargo, we are still a long way from proving
the accelerator hypothesis. There is a dearth of evidence on how low-income youth
use mobile phones, on whether they have regular access to them, and if mobile-
enabled financial services and information will be as accessible to youth as they
seem to be for adults. To be sure, the youth financial services field is only begin-
ning to understand how youth earn and manage money and, by extension, a
understand whether and to what extent the mobile phone can effectively provide
access to formal financial services. By synthesizing the current opportunities and
obstacles to using mobile-based tools to advance youth financial access and by
assessing current opinion among practitioners, this paper examines whether
mobile solutions offer the youth financial inclusion field immense hope, or just
hype.
THE PROMISE OF MOBILE AND YOUTH
The Context
A vast majority of the world’s 1.5 billion youth live in poor countries, with nearly
1.3 billion living in developing countries and one in five living on less than $1 a day.4 Low-income youth tend to start working earlier, get married and have chil- dren earlier, and engage in complex financial transactions early in life. Out-of- school youth are overrepresented among the unemployed and underemployed, even where unemployment rates are not high.5 As youth face major life transitions without adequate education, with low employment, and increasing responsibilities, financial services (especially safe, reliable savings services) can play an important role in how well they will adjust throughout their lives. We know that youth in and out of school save money, typically in small amounts.6 Yet, de 800 million youth liv- ing on less than $2 a day, only about 4.2 million have access to financial services,
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Hope or Hype?
and thus little formal means of managing their resources or saving for their future.7
Research shows that youth across the developing world want flexible, accessi-
ble savings services with transparent, and preferably low, fees.8 What money youth
do earn—from allowances, gifts, or work—tends to be saved through informal
medio, either hidden in piggy banks or given to their parents for safe-keeping.
Much like the informal saving mechanisms used by their parents or other adults in
their communities, these methods are neither safe nor reliable. While youth on the
whole have many misperceptions about formal financial services and institutions
that reduce their propensity to use formal accounts, providing them with access to
a safe, private place to store their savings is fundamental in helping them build and
gain access to their assets.9
The Promise
Mobile-based financial services, typically referred to as mobile money, may give
underserved low-income people access to financial tools that offer flexibility and
privacy at low cost. With over five billion subscribers in developing countries, el
mobile phone has created a network through which many people, particularly
those in rural areas, now have access to vital information and services.10 For youth,
this holds particular promise. Limited mobility plays a defining role for most youth
throughout the developing world, especially girls. Mobile phones could offer
youth, especially rural youth, the opportunity to leapfrog physical mobility con-
straints and the power relations within which these are bound.11 Youth are severe-
ly time-constrained (especially those still in school); they have small, sporadic
incomes; and they place high priority on finding a private place to keep their sav-
ings. Mobile financial services could help to ensure that youth customers avoid the
often expensive and time-consuming journey to a bank branch while offering
them the privacy of transacting without an adult present.
Mobile solutions could also enhance youth financial capability, which requires
access to appropriate financial services combined with the ability, conocimiento,
habilidades, attitudes, and behaviors to make sound personal financial decisions.12
Mobile-based nudges such as educational messages, reminders, or alerts sent via
Short Message Service (SMS), offer a convenient and expedient way to get impor-
tant information to youth and possibly influence their behavior. Having access to
this information early on may help youth develop sound financial behavior that
can be carried through the rest of their lives. Whereas financial education can
implant tools and knowledge, SMS reminders and alerts can prompt behavioral
changes that ultimately help youth plan and meet their future goals.
The Evidence
We use the United Nations definition of youth (edad 15 a 24), but not everyone
studying this demographic does, which makes analysis difficult. This variation also
confirms that youth are not a homogeneous group, nor is youth simply an age; es
a life stage, one full of transitions and new experiences. Youth are as varied as
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adultos, and thus understanding their needs, from skills training to mobile phone
access, can be complex.
Evidence on whether and how youth use mobile phones is sparse and often
contradictory. Research conducted by the GSMA mYouth initiative found that, de
el 4,500 children age 8 a 18 who were surveyed in Egypt, Chile, India, Indonesia,
y japon, 65 percent had access to a mobile phone and, among those who owned
a phone, 81 percent had a new handset.13 There were regional and age differences
as to when youth first owned a phone and how they used it; por ejemplo, younger
children tended to use their mobile phone to make calls while older youth sent
SMSs.
GSMA profiled countries with high mobile phone penetration rates, but these
are not representative of the developing world, much less of the low-income youth
living in it. Another study of almost 3,000 youth age 9 a 18 in three African coun-
intentos (South Africa, Ghana, and Malawi) found that a majority of youth there do
not own phones. De hecho, mobile phones per household varied widely, con 77.2
percent of households in South Africa, 29.6 percent of households in Ghana, y
solo 23.3 percent of households in Malawi having a mobile phone. A significant
portion of youth claimed to not even use a phone (60.2 percent of youth in Ghana
y 76.9 percent in Malawi), which indicates that gaining access to mobile phones
is a challenge for these youth.14
Gender plays a role in mobile phone access as well. Mientras 70 percent of par-
ents on average in the GSMA study cited concerns about their children’s use of
mobile phones, these concerns decreased as their children got older but, notably,
they decreased more significantly for boys than girls. Parental control over chil-
dren’s use of and access to mobile phones is important, especially for girls. Girls in
Ghana reported having very little access to household phones and a fear of punish-
ment if they did use them.15 Interestingly, this varied significantly by country: girls
in South Africa had more use of mobile phones than boys, while girls in Malawi
and rural Ghana had less use of them than boys; this pattern suggests that, como
mobile phone use becomes more widespread, girls may begin to reap the benefits
in greater numbers.
A study of 1,198 15- to 24-year-old youth in Kenya and Ghana examined youth
access to financial services and mobile phones.16 In general, the study found that
youth with a bank account were more likely to seek information on financial top-
ics and use financial services than those without a bank account. In Kenya, para
instancia, 75.5 percent of mobile money users between the ages of 15 y 19 tener
bank accounts. This ratio shifts as the population gets older and is reversed in the
25- to 44-year-old range: 57 percent of the unbanked in this age range use mobile
money but 42 percent of the banked do. Significantly, among low-income youth,
solo 16 por ciento de 15- to 19-year-olds and 15 por ciento de 20- to 24-year-olds use or
have access to mobile money. When asked about their savings habits, almost 25
percent of Kenyan youth age 20 a 24 who have used M-PESA also use their
accounts as informal savings mechanisms. Solo 7 percent of youth age 15 a 19
reported doing so, but this may be because M-PESA requires users to be at least 18
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Hope or Hype?
years old. In Ghana, there was very little recognition of mobile money services: 75
percent of all respondents said they had not seen any information on the topic.
Sin embargo, more than three-fourths of both urban and rural youth reportedly use
mobile phones, so there is potential to expand banking by phone as more services
are provided.
It seems that while global enthusiasm is strong for the use of mobile technolo-
gy to facilitate youth financial inclusion, there is still a lot we don’t know about the
extent to which mobile phones are prevalent among low-income youth in develop-
ing countries. En efecto, we are only beginning to understand the financial lives and
needs of low-income youth, let alone how mobile phones can help meet those
necesidades.
Perspectives
CURRENT STATE OF THE FIELD
The dearth of data on mobile-based youth financial tools has not stifled enthusi-
asm for them. To further understand how the youth financial services field per-
ceives mobile technology’s potential for youth financial inclusion, New America
Base, in partnership with Making Cents International, conducted a survey
in May 2013 of one hundred professionals with expertise in youth financial serv-
ices and capabilities, and mobile phones. The survey allowed us to test these theo-
ries by asking some key questions of experts and colleagues about their experience
working toward youth financial inclusion. In addition to this survey, nosotros llevamos a cabo-
ed follow-up interviews with individuals who helped us get a deeper look into
some of the survey results.
The survey primarily investigated three questions:
(cid:2)(cid:1)Which tools are currently being used in the field?
(cid:2)(cid:1)Which tools hold the most and least promise for the future?
(cid:2)(cid:1)What are the biggest and smallest obstacles to mobile youth financial services?
We found little consensus among respondents for all three of these questions.
Respondents came from diverse backgrounds and worked all over the developing
world. They had a wide variety of experience with mobile tools, including SMS,
mobile money, branchless banking, and data collection.
The respondents were evenly divided on how they believe low-income youth
use mobile phones: for everything, only for things like calls or texts, or rarely due
to limited access; each answer got nearly one-third of all responses. When the
questions are analyzed by the region in which the respondents work, the picture
remains mixed, which is somewhat surprising. When asked whether youth should
be considered a segment separate from adults, over half of respondents said yes;
one-fourth said it depended on the tool. When considering these two questions
together, it becomes clear that it is difficult to place all youth in one box. Ellos son
not homogeneous, and it is likely that how youth use mobile phones depends on a
variety of factors, demographic, social, y otros. It may even be that the older
youth are more similar to adults than to younger youth, but the nature of the sur-
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vey did not allow for this kind of nuanced answer.
The most interesting finding from the survey illuminated a gap between which
mobile tools currently offer the greatest opportunity and which tools respondents
think will offer the greatest opportunity in the future. Across region and profes-
sión, tools seen to offer the greatest current opportunity varied; SMS and mobile
money were seen as equally good opportunities across regions, and SMS and data
collection were seen as great opportunities across professions. When asked to
select which tools have the greatest opportunity in the future, regardless of region
or profession, everyone converged on mobile money. Even when examining results
by the tools with which the respondent had actual experience, there is no tool loy-
alty; mobile money is seen as holding the greatest promise for the future. Estos
results expose a gap between which tools are currently at our disposal and which
tools we think we’ll have access to, and that our clients will want and use, en el
future. The wide gulf between present and future thinking exists either because
mobile money is assumed to be the tool of the future and youth thus will automat-
ically use it, or because we simply don’t know what the future holds.
Finalmente, when asked which issues pose the greatest obstacle to using technolo-
gy to achieve youth financial inclusion/capabilities, there is again no clear consen-
sus among respondents. Policy and regulations, bank account ownership or access,
know-your-customer requirements, lack of data, and sustainability were all select-
ed by most people as significant obstacles, but none of them is an outlier.
Curiosamente, none of these obstacles is specific to available technology; most are
the obstacles that must be addressed before technology can be leveraged for youth
financial access or education.
The survey results provide perspective on the trajectory toward mobile-based
soluciones, but which tools are actually in use or being tested on the ground? Nosotros
will explore the range of mobile-based tools for youth financial access, from finan-
cial services to financial education. These stories are not meant to be exhaustive
but simply to illustrate how the tools just discussed are used today.
Practice
Financial Services.
While it seems a number of organizations and banks are gearing up to launch
pilots, investigación, and products in the next year or have products in the very early
stages, there are few examples of mobile-based banking for youth, particularly for
those under 18 years old.17
In Kenya, Equity Bank is a leader in the field of mobile banking for youth. En
2007, the bank began offering a loan to youth age 18 a 35, which was specifically
tailored to youth needs and included financial education, training, and mentoring.
En 2011, looking to technology-based solutions to increase scale and reduce trans-
action costs, Equity Bank began offering a technology-based solution that allows
youth clients to use their mobile phones to apply for loans, make payments, y
deposit or withdraw money. By January 2012, the service had nearly one and a half
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million users.18 Equity Bank also offers mobile banking through a mobile van,
thereby giving youth without mobile phones the opportunity to make deposits not
far from their homes. The bank has found that agent banking through point-of-
sale devices or phone solutions is the most popular mechanism for deposit and
withdrawal.
As part of the multicountry YouthSave Initiative,19 PostBank in Kenya began
piloting a youth savings account called SMATA in July 2011. Based on pilot feed-
atrás, it became clear that youth needed a flexible delivery channel, which led
PostBank to offer the savings account via mobile phone and agent networks. El
youth mobile savings account uses the M-PESA platform, allowing youth who
have access to an M-PESA account to easily transfer money between any M-PESA
account and their SMATA account via mobile phones. A youth savings account
holder can deposit money into their account in three ways: through a mobile
phone, as long as they have access to an M-PESA account; through a bank agent;
or through a bank branch. As of May 2013, PostBank had over 17,000 open sav-
ings accounts, 35 percent of which were opened by girls. SMATA will soon include
an SMS-based financial education component for current clients.
En 2012, Tunisiana, a Tunisian telecommunications firm, in partnership with
the Tunisia Post, began offering a mobile banking service targeted at the
unbanked, called Mobiflouss. Users purchase prepaid cards at the post office, registro-
ister with the service via their mobile phones, and are instantly connected to serv-
ices such as airtime top-up, peer-to-peer money transfer, and mobile bill pay.
Students are able to receive government grants directly into their Mobiflouss
mobile wallets. Though not specifically designed for youth, the service was heavi-
ly targeted at students, and by March 2013, most of its 128,000+ active users were
bajo 30. Tunisiana also offers a mobile education service called MobiWorks,
which aims to increase youth employment.
En 2012, Safaricom and the Commercial Bank of Africa jointly launched a new
mobile banking product called M-Shwari, which is a savings and loan product that
provides all M-PESA users with access to high-interest accounts and short-term
loans. By the end of 2012, 75 percent of subscribers were between 18 y 35, cual
shows that this service is in high demand among youth and young adults. Users
save their own money and then borrow against it for 30-day loans of up to about
$230. The loans do not require fees or paperwork; clients simply dial a number to
receive an SMS with their credit limit. Two and a half months after its launch, METRO-
Shwari had over 1.6 million customers.
Financial Capabilities
Indonesia-based Plan International’s Youth Economic Empowerment project,
which links rural youth with employment and entrepreneurship skills to microfi-
nance services, uses SMS to provide additional financial education to its youth par-
ticipants. The youth, edad 17 a 24 and primarily female, receive training at special-
ized training centers in life skills, work readiness, basic entrepreneurship, financial
education, and reproductive health. The project brings employers to the youth or
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takes the youth to various workplaces to see the work firsthand. Además, el
project regularly sends each participant SMSs, cual, Por ejemplo, encourage them
to save part of their earnings each week. Anecdotal evidence suggests that the par-
ticipants modified their behavior once they began receiving the messages; En realidad,
they went from spending their income to buy new mobile phones or play video
games to competing with each other on who could save the most.
In Ecuador, Freedom from Hunger (FFH) and partner financial cooperatives
provide financial education and savings services to youth. The project began sim-
capa, by providing youth in local schools with education-promoting savings and
good money-management decisions. Sin embargo, FFH found that financial educa-
tion was not enough to encourage youth to open up savings accounts; they were
not making the connection between the information they learned and their
comportamiento. FFH and its partners began strengthening the link between its financial
education and actual savings products by including information on access to and
use of various financial services offered by the cooperatives. More importantly,
FFH and its partners began promoting the uptake of savings accounts by facilitat-
ing some of the opening processes at the school sites. In addition to in-school
financial education sessions offered once a week, the student participants receive
SMSs reinforcing the information they learned in class. In order to avoid dormant
accounts, representatives from financial cooperatives visit young people in their
schools and homes in rural areas to take deposits via a smartphone, thereby saving
young people in rural areas the cost of traveling to a town to make a deposit at a
branch. Desde 2011, the project has reached over 10,000 youth with both financial
education and access to savings accounts.
YouthSave Initiative partners in Colombia are currently conducting a random-
ized, controlled trial experiment that aims to measure the effectiveness of mobile
SMSs and reminders to increase savings rates among youth account holders. En
Colombia, 70 a 80 percent of youth, including low-income youth, own their own
mobile phones.20 The yearlong experiment, which began in March 2013, will meas-
ure whether SMS effectively promotes and increases saving rates, whether the SMS
content matters, and whether SMS frequency matters. Randomly selected youth
were divided into three treatment groups that receive either financial education
SMSs or simple savings reminders.
Although rare examples of mobile banking with educational nudges for youth
financial access exist, we anticipate that usage of both will grow substantially in the
near future. A number of existing innovative mobile solutions go beyond the tools
outlined above and bring financial education and more to youth. Examples of solu-
tions under consideration or in testing include mobile stock-picking as a form of
education and income earning; tablet-based education using apps; mobile gaming
that aims to improve literacy; and using social media for education.21 Still, efforts
in the field to create, prueba, and implement solutions remain the exception, y qué
they have revealed is that actual innovation and new solutions have not kept pace
with increasing enthusiasm for mobile solutions.
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Hope or Hype?
OBSTACLES TO USING MOBILE SOLUTIONS AS AN ACCELERATOR
What is stifling innovation on mobile-based youth financial access?
The lack of evidence on mobile phones and youth, particularly on financial inclu-
sión, is most likely due to the fact that mobile financial services and capabilities,
and youth financial services generally, are very new. After examining the gap
between theory and practice, we find there are a number of barriers, both youth-
specific and general, that the field must address before we can achieve universal
youth mobile financial access and inclusion. The survey results indicated that,
while there is no clear consensus across region or field as to which obstacles are the
most significant, the biggest obstacles have little to do with mobile technology
itself and much to do with our ability to use it to effectively reach the low-income
youth demographic. This section outlines the five obstacles we think are signifi-
cant inhibitors of mobile-based solutions to youth financial access.
Two obstacles that affect low-income adult and youth populations alike are
infrastructure problems and the lack of social data. While certainly not exclusive
to youth, infrastructure failures affect youth acutely. Adults and youth face similar
challenges to accessing network coverage, which can vary widely within and
between countries. As one survey respondent said, “The mobile network coverage
in Ghana is still inadequate. I can’t trust that my SMS will make it to a colleague;
why would I trust that my money will make it to my account?” As for social data,
it is difficult, if not impossible, to create and pilot a product for a target group with-
out knowing the group’s needs and restrictions. According to a global Making
Cents International survey of 131 organizaciones, 70 percent cited not knowing how
to attract or retain youth as a challenge to delivering youth financial services, y
83 percent cited a lack of market information about the youth segment.22 This is a
widespread issue and speaks to a deeper need for adequate market research before
a product is offered to any demographic. When it comes to providing mobile
financial services and capabilities, what we don’t know about youth far outweighs
what we do.
Regulation
Arguably the biggest obstacles to youth gaining access to financial services, dejar
alone those mobile-enabled, are the legal and regulatory barriers they face, name-
ly, the minimum age and identification requirements to open and transact through
an account. Most countries require account holders to be at least 18, with few
exceptions.23 Those younger than 18 need a parent or guardian to open the account
and withdraw money, although youth often may deposit money without an adult
present. Since privacy is a top priority among youth, many do not wish to inform
their parents about their finances and therefore are less likely to open a joint
cuenta. Además, 70 percent of children in the world’s least developed countries
do not have birth certificates or registration documents.24 In some countries, como
Uganda, youth must provide multiple forms of identification, proof of residence,
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proof of income, and proof of relationship between the joint account holders, de este modo
making opening an account extremely difficult.25 In fact, many countries do not
issue formal identification cards until youth reach the age of 18. Además,
obtaining the documents is costly and arduous, which makes many parents unwill-
ing to acquire them for their children.
Ownership
For many youth, their personal mobile phone is an object of desire and a symbol
of success. Además, for the delivery of financial services and education, mobile
phone ownership is paramount to ensuring both privacy and the receipt and ben-
efit from all educational SMSs. Desafortunadamente, youth face many roadblocks to
phone ownership, including cost (addressed below), access to SIM cards, y
power dynamics that restrict access to even a household phone, especially for girls.
In nearly all African countries, including Kenya, SIM card purchases are restricted
to those 18 and older.26 So, even if a 15-year-old girl had access to a phone, she
couldn’t purchase a SIM card to use it. Además, the role of gender largely deter-
mines whether girls can borrow or own their own phone. A study of mobile phone
access among youth in Ghana, Malawi, and South Africa found that when girls
reach puberty, their mobility and access to borrowing a phone becomes severely
limited because phone access is often linked to “inappropriate” behavior.27
Costs
When expanding a school-banking program in Kenya to include mobile banking
through M-PESA, a survey respondent found that the costs of service were prohib-
itive for her students. With their average deposit size being little more than the 20-
shilling cost per transaction, the girls in the program found the service too expen-
sive. Given that mobile money has been geared toward profit-making and less vul-
nerable populations, low-income youth (and adults) are largely excluded from
services. También, telecoms are not the only entities that charge fees; banks also charge
fees per deposit or withdrawal that can further prevent usage. De hecho, los unidos
Nations Capital Development Fund (UNCDF) YouthStart program found that
youth did not save in formal financial institutions, due in part to the unclear and
costly transaction charges, costly or complex requirements to open an account,
and high minimum balances to keep accounts active.28
THE ROAD AHEAD
It is clear that the hope for mobile solutions to youth financial inclusion will spur
continued investigation and innovation. The reality behind the mobile money
hype, sin embargo, is that we have much to learn about the youth demographic, acerca de
financial services and capabilities for youth, and about how and whether mobile
technology can be used effectively to bring these services to youth. While a few
examples do exist, much more must be done before we can move forward confi-
dently.
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Hope or Hype?
We have identified four pressing questions that must be answered in order to
maximize the potential of mobile-enabled financial services and capability tools
for youth. We also provide several recommendations that we hope will advance the
campo.
Questions
How are the challenges unique or specific to different segments of youth?
Until we know more about boy’s and girl’s needs and limitations, it will be difficult
to design, prueba, and pilot products that can achieve their financial inclusion.
Understanding how youth are unique (es decir., different from adults and among them-
selves) will facilitate the immediate uptake and use of appropriate products and
services. It also will help us get a better sense of the timeframe between where we
are now and full financial inclusion. If some youth are more similar to adults than
was previously thought, perhaps minor modification to existing tools is all that is
necessary. Some youth are likely very different from adults, and new tools, prod-
ucts, and policies will need to be invented and implemented before we can reach
our goals.
How can we provide these services to youth in a cost-effective manner and, para
those who already benefit from appropriate services, what is needed to serve them
mejor?
Some would argue that finding a business case for financial services for the poor is
the holy grail. Long-term sustainability is incredibly important, but it remains a
far-off goal. Taking lessons from adult financial services, we know that product
cross-selling, gaining large numbers of clients, and client segmentation are a few
strategies that can address the any losses related to providing a new product or
servicio. Youth financial services are particularly costly, given the nature of their
income. De este modo, finding and creating methods of cost reduction, and finding insti-
tutions willing to experiment, are a priority.
What are the gender differences in financial services needs and mobile phone access
and usage?
As with adult mobile financial services, we are beginning to understand that gen-
der gaps in mobile phone access, ownership, and literacy are an enormous obsta-
cle to full financial inclusion. The assumption that “everyone has a mobile phone”
is a dangerous and false one: many women have very limited access to mobile
phones, even if there is one in the household. Access to technology and confidence
from experience with using technology are barriers that women and girls face to a
much higher degree than men and boys. There is still much we don’t know about
how women and girls use the mobile phone. It is critical that we learn, examine,
and build products and services that address and mitigate all limitations based on
género.
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Jamie M. Zimmerman and Julia Arnold
How can policies and regulations protect youth clients while not inhibiting their
access to vital financial services?
The current policy and regulatory environment in most countries severely limits
youth access to financial services and to mobile phone ownership and access, par-
ticularly for those under 18. While protecting the rights and privacy of minors is
paramount, we must work with governments, regulators, and central banks to find
a solution that enables youth access while keeping them, and their savings, safe.
Recommendations
Gather data. Our enthusiasm for a cost-effective and efficient financial services
tool may be a bit premature, given what little we know about our target demo-
graphic. Before we can successfully invent new tools or better leverage existing
unos, we must first learn much more about how youth use mobile technology and
financial services. This is particularly critical when seeking a long-term sustainable
product: without knowing more about youth, we cannot create or identify a model
that brings financial services to a greater number of youth at little or no cost to the
institución, bank, or company.
Enable innovation. Relax regulation to create an environment conducive to
innovation and experimentation with mobile-based financial services or other
capability tools offered directly to youth.
Prioritize the segment. Explore costing and business models that consider long-
term client profitability of tech-based youth financial services. Youth need to be
seen as a coveted market segment. Only then will product and service providers
invest in the market research, pilot-testing and product development that will
result in appropriate, viable services.
Remember that, in isolation, adequate access is an inadequate approach.
Incorporate behavioral economic theory into any mobile-based product, programa,
and policy design. Focusing on facilitating or nudging, positive financial behaviors
will enhance efforts to extend access to products and services on mobile money
platforms by inculcating good financial habits early in life.
CONCLUSIÓN
It is doubtful that youth will be able to piggyback on the advancements being made
in this area any time soon without overcoming some significant hurdles. El
obstacles low-income youth face in terms of formal banking, financial literacy, y
account and phone ownership are significant, more so than for their adult coun-
terparts. Lack of data and regulatory hurdles further limit our ability to immedi-
ately understand and address these challenges. Yet the allure of mobile solutions as
an accelerator of youth financial inclusion remains compelling, and if the potential
is as great as it seems—even if still in theory—then the imperative to find solutions
to these obstacles is stronger than ever.
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Hope or Hype?
1. Lewis Mandell and Linda Schmid Klein, The Impact of Financial Literacy Education on Subsequent
Financial Behavior, Association for Financial Counseling and Planning Education, 2009.
2. Julia Arnold, Women, Mobile Phones, and Savings, Grameen Foundation, 2012.
3. Payal Pathak, Jamie Holmes, and Jamie Zimmerman, Accelerating Financial Capability among
Youth: Nudging New Thinking, New America Foundation, 2011.
4. Banco mundial. 2006. World Development Report 2007: Development and the Next Generation, avail-
able at https://openknowledge.worldbank.org/handle/10986/5989.
5. Tanaya Kilara and Alexia Latortue, Emerging Perspectives on Youth Savings, Consultative Group to
Assist the Poor (CGAP), 2011.
6. Por ejemplo, see Rani Deshpande, Paying Attention to the Financial Needs of Youth, 2011;
Deshpande, What Do Youth Savers Want? YouthSave, 2012; Kilara and Latortue, Emerging
Perspectives.
7. Kilara and Latortue, Emerging Perspectives, pag. 2.
8. Deshpande, What do Youth Savers Want, páginas. 5-6; Policy Opportunities and Constraints to Access
Youth Financial Services, UNCDF YouthStart, 2012, pag. 14.
9. Policy Opportunities and Constraints, pag. 19.
10. See http://mobithinking.com/mobile-marketing-tools/latest-mobile-stats.
11. Gina Porter, et al. “Youth, Mobility, and Mobile Phones in Africa: Findings from a Three-
Country Study.” Information Technology for Development, 2012.
12. Pathak et al., “Accelerating Financial Capability Among Youth.”
13. GSMA, Children’s Use of Mobile Phones: An International Comparison, 2012.
14. Portero, et al. Youth, Mobility, and Mobile Phones in Africa.
15. Ibídem.
16. David Montez, Youth Africans’ Access to Financial Information and Services: Lessons from Surveys
in Kenya and Ghana, InterMedia, 2010.
17. Por ejemplo, Tunisiana, a Making Cents partner in Tunisia, offers a mobile banking product
with Mobisouk/Mobiflouss; a longitudinal study of uptake and activity will be completed next
año. Three of Youth Start’s partners are beginning to use mobile: PAMECAS in Senegal is using
SMS to deliver financial education messages to the youth whose saving accounts have been inac-
tive for over two months; Union of Savings and Credit Cooperative Umutanguha in Rwanda is
making mobile money accessible their clients, including youth; and FINCA DRC is using point-
of-sale devices for financial transactions aimed at all clients; they reach youth by putting each
POS in places where youth go.
18. Youth-Inclusive Financial Services: Scaling Up and Mobile Banking, Making Cents International,
2012.
19. Youth Save is a project led by Save the Children in partnership with the Center for Social
Development at Washington University in St. luis, the New America Foundation, y
Consultative Group to Assist the Poor, and supported by The MasterCard Foundation. El
Youth Save Consortium and its local partners (financial institutions and researchers) are com-
mitted to developing, delivering, and testing savings products accessible to low-income youth in
Colombia, Ghana, Kenya, y Nepal. Through this project, the consortium will share lessons
and resources on delivering savings services sustainably while improving the life chances of low-
income youth in the developing world.
20. Personal correspondence with Alejandra Montes, Youth Save project coordinator in Colombia.
21. GSMA, “mLearning: A Platform for Educational Opportunities at the Base of the Pyramid,"
2010, pag. 22.
22. Ver
http://www.makingcents.com/pdfs/yfs/Making%20Cents_Opening%20Plenary_Youth%20Fina
ncial%20Services%20Survey%20Findings.pdf.
23. “Policy Opportunities and Constraints,” UNCDF YouthStart, 2012, páginas. 10-11.
24. Deshpande, What Do Youth Savers Want?
25. Ibídem.
26. Kevin Donovan and Aaron K. Martín, “The Rise of African SIM Registration: Mobility, Identity,
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Jamie M. Zimmerman and Julia Arnold
Surveillance and Resistance,” Information Systems and Innovation Group Working Paper,
London School of Economics, 2012.
27. Portero, Youth, Mobility, and Mobile Phones in Africa, pag. 152.
28. UNCDF YouthStart, Policy Opportunities and Constraints.
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