For too long, the world has turned a blind eye to the very real financial needs of young people, including the need to be able to save money in a secure yet accessible way. Most of the time, young people save their money informally. They rely on secret places like piggy banks and shoeboxes. Yet while convenient, these informal savings habits carry with them a number of dangers, such as loss in an accident like a fire or flood. More likely, however, is that a young person's savings will be taken from them. The savings might be stolen during a robbery, but perhaps the most significant danger is that a friend, parent, or sibling - someone with knowledge of the victim's savings habits - will "borrow" their hard-earned funds.
This risk is why it's so important that young people are empowered with a way to keep their savings safe: they need places that only they can access. At the same, they can also be supported in tracking their savings habits and develop responsible money management skills. At Child and Youth Finance International, we believe that young people have a right to safe and appropriate child and youth friendly savings accounts at formal financial institutions. And in financially underserved areas where such accounts are often unavailable, innovative strategies such as mobile banking and the SchoolBank concept represent a next best option for helping young people develop responsible formal savings habits.
In underserved areas, young people usually have access to a community center of some sort, such as a church, post office, school or town hall. Through the use of mobile banking technology, these community centers can become safe local savings points. Such "mini-branches" offer an accessible way for young people to move from informal to formal savings habits. If situated in schools, they can also be student-run, thereby offering the chance to acquire additional financial skills to those interested in becoming involved. Student-run mini-branches provide the additional benefit of facilitating peer-to-peer interaction on money matters, potentially creating a local community of economically motivated youngsters and enabling future entrepreneurship.
It's not just young people that stand to benefit either, as by offering child and youth friendly savings products, banks can simultaneously strengthen their local communities and build personal relationships with tomorrow's entrepreneurs. For those organizations that are beginning to place priority on our children and youth's financial inclusion and literacy there are resources available for them to turn their principles into practice.
Financially responsible children become financially responsible adults, and financially responsible adults often choose to enter the small business sector. In doing so, they become job creators, both for themselves and their communities. With so many positive outcomes, it's time to move past piggy banks and shoeboxes and begin taking the savings needs of young people seriously.