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The Role of Parents and Families in Youth Financial Inclusion

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.


In many developing countries, the proportion of people aged below 18 represents 50% of the population. While governments and policymakers attempt to tackle the provision of essential services, young people and their families continue to grapple with financial planning. In 2014, almost half of the world’s youth held an account at a formal financial institution. Yet, in many developing economies, 24% of youth between the ages of 18-24 said they do not have a formal bank account because someone in their family already has one. As such, there is a critical need to further understand the interplay that exists between adults and young people at the household level, and how those relations influence financial inclusion.

“Parental guidance in the form of encouragement to save or help to build trust in formal institutions can spur the youth entry into and experience with financial services.”

What role do parents and families play in influencing young people’s access to and utilization of financial services? While it is well known that the lives of young people are intrinsically linked to those of their parents, the SEEP Network’s Youth and Financial Services Working Group set out to examine the nuanced dynamics that exist between youth and adults and how these relations can help or hinder their access, use and management of financial services.

As the household is the first place of learning, parents or caretakers provide early guidance to their children regarding savings and financial services. In doing so, they are effectively building practices and behaviors that will influence their child’s future disposition towards financial planning and goal setting. This is important in both the formal and informal savings sector as many youth-centered programs and services require parental permission to participate.

Youth and their relationship to family finances embody a push-me, pull-you dynamic that can be either beneficial or detrimental, and can change as youth age and take on more responsibility.”

As youth age, it is only natural that they will seek more financial autonomy to pursue individual endeavors. However, in many developing countries, familial linkages do not automatically diminish, creating a complex and interdependent financial landscape.

Through our research, the Working Group has learned that in order to improve the utilization and usage of inclusive financial services, programs that target youth need to leverage and integrate household dynamics into their design and implementation plans. The Working Group provides several key recommendations on how to do so: 

  • Develop and deliver synchronized financial education for youth and adults that is both user-friendly (to reach the unbanked) and reinforces household financial capability
  • Apply a gender lens and a client-centered strategy to include parents and family members throughout the projects or programs design and implementation phase
  • Exercise flexibility and creativity when designing programs to soften barriers to entry
  • Establish protocols that protect and empower young people’s financial capabilities while also developing the capacity of staff to work effectively with youth

To learn more about the household dynamics that influence the participation of youth in financial services, read the entire publication here!

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