Role of Youth in Financial Inclusion
Updated: Nov 12, 2021
Today's International Youth Day!
We want to highlight the role of Youth in Financial Inclusion today.
Access to financial and social assets is a key contributing factor to help youth make their own economic decisions and escape poverty. According to Global Findex Survey 2017, in low-income economies such as Cambodia, Lao PDR, and Myanmar, fewer than 24 percent of youth have an account, and only 3 to 4 percent of them save formally. There remain many reasons which cause the young people inaccessible to financial inclusion. The framework of financial service providers such as banks, credit unions or microfinance institutions, are not designed to be youth inclusive or protective of youth rights. Youth still face many barriers in accessing financial services, including restrictions in the legal and regulatory environment, lack of identification, inappropriate and inaccessible products and services, and low financial capabilities.
A multi-stakeholder approach engaging government, financial service providers, youth-serving organizations and youth stakeholders plays a vital role to overcome these barriers and achieve financial inclusion. Youth, of course, need to be at the center of this dialogue. Access to financial literacy lies as a fundamental need to promote the role of youth in the financial inclusion. Policies, which are both youth friendly and protective of youth rights, should be implemented. Some actions such as providing maximum control to youth within the legal and regulatory framework, minimizing age, and ease of identity requirement restrictions are needed to open access for young people. Appropriately designed financial services can play a direct role in supporting young people's transition into employment, particularly for youth who are starting their own income-generating activities for which they require enterprise finance, insurance, leasing and payment services, such as money transfers, in order to start, sustain and grow their businesses. Moreover, the financial service providers should enhance the use of FinTech which is youth friendly and easier to connect people than traditional ways.
Financial Inclusion largely contributes to the development of a country. The participation of youth constituting a large number of population is significant in the promotion of Financial Inclusion. The multi-stakeholder approach can bring increased attention to the opportunities and rights of youth financial inclusion and their skills in financial management and capability. Thus, they can start their own businesses or entrepreneurship and become responsible citizens contributing to the country's financial inclusion.