CSD is part of a global consortium supported by the MasterCard Foundation that is piloting YouthSave, a youth savings initiative in Colombia, Ghana, Kenya and Nepal. The goal of the five-year project is to understand the conditions for sustainable delivery of savings products and services that can substantially improve the life chances of low-income youth in the developing world, and transfer this knowledge to those in a position to support their accessibility and quality. YouthSave ran from 2010 through 2014 and had an extensive multi-method research agenda.
In addition to CSD, the consortium includes Save the Children, the Consultative Group to Assist the Poor (CGAP), and the New America Foundation. The consortium works closely with local research partners and financial institutions to implement the project.
Why youth savings?
Saving services for low-income youth have the potential to be a high-impact development tool. Nearly two decades of work, in both developed and developing countries, has revealed a connection between increased assets and improved youth outcomes in a range of areas. Though much of this work has focused on family asset levels, recent small-scale studies have shown promising effects of youth-owned savings accounts on key measures of youth development. Collectively, prior learning suggests that linking young people with mechanisms to accumulate financial savings may be a means to affect multiple youth development outcomes. Specifically:
- Family asset levels have been shown to affect children’s economic outcomes later in life.
- Family asset levels, and specifically savings levels, can affect children’s educational outcomes.
- Research in developing countries has also documented connections between assets and mental and physical health.
- Research has shown that family asset levels can affect children’s sexual/reproductive behavior.
Despite these promising indicators, research on the true social and commercial utility of youth savings has not kept pace. Little specific guidance is available on what types of savings services may produce positive impacts on youth while achieving commercial viability in different contexts. More detailed and credible information would help support the investment decisions that financial institutions, nongovernment organizations, donors, and governments around the world are increasingly considering to promote youth savings.