‘Microfinance does not usually serve the very poor, for whom it can represent a route into debt rather than a way out of poverty.’
Recently, savings initiatives for young people have been garnering increasing attention within the development community for their perceived potential to promote both youth development and financial inclusion. This paper surveys current practice to better understand the diverse range of youth savings initiatives under way in developing countries, and the actors promoting them in a range of forms for various objectives. It also gathers the little evidence available on the extent to which such savings initiatives are fulfilling their perceived dual development potential. The paper ends with key questions that must be answered with further research and practical experimentation, before this development potential can be confirmed.
The G2P opportunity: Five reasons why now is the time to leverage social protection to enable financial inclusion and savings among the poorest
Around the world, increasingly widespread cash-based social protection schemes - programmes delivering cash payments to over 750 million people among the world's most vulnerable populations - are creating opportunities, particularly through new delivery mechanisms. Policymakers and experts working in financial inclusion, social policy, human development, and behavioural economics have expressed wide interest in leveraging this shift in delivery approaches by incorporating mechanisms that either enable or encourage savings behaviour. Growing, albeit relatively limited, global evidence suggests that linking social protection payments (commonly referred to as government-to-person (G2P) payments) to savings opportunities has trifold benefits. Financial intermediaries benefit from regular infusions of cash and new clients; the recipients gain access to the tools to manage their assets and save for investments, smooth consumption, and create a savings buffer to protect against adverse events; and governments achieve improved efficiency in payments through electronic delivery and multiplier effects through enhanced developmental impact. In this paper we posit that the financial inclusion field faces a unique and important opportunity for deeper exploration of the potential benefits of direct savings-linked G2P payments for developing world governments, financial intermediaries, and most vitally, the clients themselves.