Usage and Dormancy of Youth Accounts

This blog originally appeared on The SEEP Network Blog, co-authored by Jennifer Denomy and Rebecca Hession.

The United Nations Population Fund reports that there are 1.8 billion young people between the ages of 10 and 24, with 89 percent of them residing in less-developed countries (2014). With appropriate knowledge and tools, youth can be financially empowered to access economic opportunities in a sustainable manner. Although they represent a large potential market, the integration of youth into the formal financial system is still a relatively new concept in many countries. In order to address these operational issues and explore innovations in this area, the SEEP Network’s Youth and Financial Services Working Group commissioned and wrote four Promising Practices Briefs. The topics of the briefs were selected during a series of consultations held with Working Group members in January 2015.

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 Close to 90% of the world’s young people (between ages 10 and 24) live in less-developed countries, and as the world population continues to grow, people will need access to health services, education, and the job market. Along with these, youth will require access to formal financial services, and need to be equipped with the knowledge and tools to be empowered and integrated into financial systems. While almost half of youth globally have accounts at formal financial systems, only 18% of this group actually used their accounts to save money in 2014. As youth financial inclusion continues expanding, issues of usage and dormancy must be understood and addressed effectively.

How does a financial product become dormant and why should financial institutions focus on youth dormancy specifically? A financial product becomes dormant when it remains inactive for a longer period than average. Not only do these inactive financial products hinder the financial inclusion efforts for youth, but they can also result in costs for financial institutions, in terms of administration resources. In order to identify factors that contribute to youth dormancy and strategies to jump-start usage, the SEEP Network’s Youth and Financial Services Working Group reviewed several case studies and program assessments from around the world.

Access, Usage, and Dormancy
  • Access: The availability of affordable and appropriate financial services to a given person.
  • Usage: The act of employing or utilizing a financial service such as savings, credit, or other financial products.
  • Dormancy: A period during which a financial product that has been previously accessed remains inactive, for a longer period than average, as a result of an intrinsic or extrinsic factor.

Source: Definitions of access and usage were adapted from the Center for Financial Inclusion's "Financial Inclusion Glossary."

The Working Group found that there were two main types of factors that can lead to youth dormancy. Intrinsic factors, such as a lack of understanding and interest on the part of youth clients, and extrinsic factors, such as restrictive conditions or simply a lack of services altogether. This double-edged sword limits youth engagement with financial services, which can stunt long term sustainable development. However, the good news is that the Working Group found that there are many solutions that can be implemented to promote greater account usage among youth.

These solutions include:

  • Tailored financial education and marketing campaigns;
  • Youth-focused approaches that take young people’s life cycle needs into consideration;
  • Innovative regulations, including reduced limitations for youth and increased financial service access points; and
  • Greater inclusion through technology, alternative access points and savings groups, especially in rural areas.

Finally, the Working Group found that dormant bank accounts are not always an issue and they can actually be part of a broader solution by being used to channel funds for new youth programs. You can find out how the Scottish government was able to recycle inactive accounts to benefit communities in the brief! Learning from these past and present initiatives will benefit both financial service providers and youth as their use of formal financial accounts and products increases.

To learn more about youth usage and dormancy and the global solutions employed, read the entire publication here!


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Rebecca Hession is the Program Assistant for Working Groups and Learning Initiatives at The SEEP Network. In this role, she supports the communication and facilitation of SEEP’s working groups, and the preparations for their respective projects and events. She has previous non-profit and NGO experience, including an internship with the World Bank Group while in graduate school. Rebecca holds a BA from the University of Central Florida, and an MA in Latin American Studies from Georgetown University’s School of Foreign Service, focused on development and human rights.
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