Saving(s) the Future!
YouthInvest has encouraged youth to save by providing them with training on financial education as well as enabling them to access a low-minimum balance savings account made possible through a partnership with Al Barid Bank in Morocco. (The YouthInvest team managed to decrease the minimum deposit amount from 100 MAD to 5 MAD by negotiating with the banking institution).
While the savings component was incorporated into most aspects of YouthInvest's programming in Morocco, two particular initiatives made education on savings behaviour their tenants:
100 Hours to Success – a training program that offered a blend of financial education, business skill development and life skills.
YouthSavings - a savings awareness program that delivered financial education messages on savings through condensed sessions (1 hour-long) that were also attended by a representative form Al Barid Bank allowing students to open a savings account on the spot.
Our 'Youth Savings Behaviour' study is a recent addition to our YouthInvest Praxis Series.
Specifically, the publication sought to:
- Understand youth opinions about saving;
- Identify the specific ways that YouthInvest participants save their money;
- Determine the impact of saving with regards to quality of life;
- Document the level of satisfaction of the youth with regards to the process of opening a savings account;
- Understand how youth anticipate saving and using their savings in the future;
- Note recommendations from the youth to further improve their access to saving opportunities.
Our key take-aways from the study that aided in improving our overall youth programming included the following.
1. Consumer education is key: Youth understand the selection criteria involved when choosing a financial institution. However, they often do not have enough information to compare the different savings options that are offered. On that note, account accessibility is the most frequently cited factor for choosing a particular banking institution. The youth are interested in being able to deposit or withdraw their money whenever they want, and some want a bank card to facilitate this process.
2. Opening a savings account helps youth save: Youth had the following testimonials to share with the YouthInvest team.
- "When I save at home, I spend my money easily because it's always at hand, but when it's in the bank I take out my money only when I really need it."
- "For me, opening an account was motivation to save."
3. Once youth open an account they keep it open: Among the interviewees, 94% of the youth kept their accounts open. The average amount of time to keep an account active is 14 months
4. Youth continue to save over time: For 40% of the youth who took part in the study, the amount in their account increased over time, while 43% said that the amount stayed the same since the date they opened the account.
These figures should be contrasted with the fact that only 16% of the youth save on a regular basis while 84% save only when they have money. The latter stated that they do not save regularly (weekly or monthly) because they do not have a regular income.
5. A gender gap in savings rates remains: The female participants were more likely to save than the male participants.
30% of the male participants spent the total amount saved, whereas only 4% of the female participants exhibited similar spending patterns.
For more insight into the youth savings behaviour in Morocco, be sure to refer to the original study document.
How can we reduce the gender differences in savings behaviour and encourage more male participation? What initiatives have worked and why?
While YouthInvest did not particularly focus on rural clients, many of our beneficiaries were from peri-urban areas. Does your organisation have any tips on making savings more enticing to rural youth clients?