Local youth carpenter at work, Nigeria / Shutterstock.

12 August 2021

Overcoming the barriers of youth financial inclusion

By Diana Schvarztein, Policy Manager, AFI

This International Youth Day, it is timely to recognize the efforts of AFI members from 90 developing and emerging countries in promoting youth financial inclusion.

Nearly half of young people (15-24 years old) in developing economies are excluded from the formal financial system. This important demographic has also been disproportionately impacted by the pandemic through loss of education and employment opportunities.

Against this backdrop, AFI members are making significant strides towards implementing policy and regulatory changes that are overcoming barriers to youth financial inclusion in their jurisdictions.

Some recent milestones achieved in this second year since the network endorsed the Kigali Statement on accelerating the financial inclusion of disadvantaged groups include:

1. AFI’s first policy framework on youth financial inclusion

The launch of the network’s first knowledge product in this policy area provides specific regulatory and public policy approaches in four pillars – data collection, national strategies, regulatory reforms and public policies, and non-regulatory interventions – to advance the youth financial inclusion agenda by drawing on the experiences of AFI members.

In addition, the experiences and key learnings of 16 member institutions that included youth either as a main pillar or cross-cutting group in their national financial inclusion strategies were encapsulated into a guideline note, “Integrating Youth Into A National Financial Inclusion Strategy”.

From a cross-cutting perspective, the recently launched Digital Financial Literacy Toolkit presents practical guidance for financial inclusion policymakers on formulating and implementing digital financial literacy strategies and interventions that list youth as a main target group.

Youth Financial Inclusion Policy Framework


2. Implementation of regulatory and policy reforms by AFI members to advance youth financial inclusion

AFI members are implementing regulatory and policy reforms to address the constraints of youth financial inclusion through innovation while also ensuring consumer protection and responsible finance.

For example, the Central Bank of Egypt (CBE) allows young people (16 to 21 years old) to open bank accounts without parental or legal consent, as part of efforts to overcome age restrictions on accessing financial services. This complements CBE’s NilePreneurs initiative, which provides financial and technical support for youth-led startups.

Elsewhere, Pakistan launched the Youth Entrepreneurship Scheme, which provides loans to young entrepreneurs to set up new businesses or expand existing ones, under the guidance and supervision of the State Bank of Pakistan. Banque de la République du Burundi affirmed  that similar measures were adopted in Burundi last year with the establishment of the Youth Investment Bank, which provides financial support to youth entrepreneurs.

Also in 2020, Central Bank of Seychelles, in collaboration with the National Financial Education Secretariat, launched Youth 4 Youth, its first financial education youth ambassadors program that aims to empower youth and encourage peer-to-peer learning on financial education.

3. Working with private sector partners and youth to mitigate COVID-19 effects

AFI held a virtual event in June that drew attention to many of the diverse policy responses that are helping to tackle the negative impacts of the COVID-19 crisis on Africa’s youth, a group that has been disproportionately hit by the pandemic. Furthermore, a session involving key private sector stakeholders was dedicated to identifying partnership solutions for youth inclusion in this region.

Participating in the event was Central Bank of Nigeria’s (CBN) Dr. Paul Oluikpe, who called for “more policy options, more policy initiatives and a combination of policies to try and unfreeze this space for our youth, so they can be resilient, sustain themselves and survive the impacts of COVID.”

Among the measures Dr. Oluikpe listed as CBN’s responses to the pandemic was the implementation of the Nigerian Youth Investment Fund, which aims to create 500,000 jobs for youth ages 18 to 35 years old by 2023. It also launched the Creative Industries Financing Initiative, a loan scheme to provide long-term access to low-interest financing for entrepreneurs in the creative industry.

Gender considerations, AFI members and private sector stakeholders agreed, should be taken into consideration when developing policies and interventions. The representative of the Reserve Bank of Zimbabwe added that it is important to address some of the vulnerabilities and gaps in gender and youth, particularly around mobile penetration and the value of transactions, which are both higher for male youth than female youth.

Road ahead

AFI’s work in youth financial inclusion reinforces global efforts to create an equitable present and future for this prominent generation. Building on members’ high demand and interest, this policy area aims to position youth at the core of regulatory and policy interventions.

Despite the challenges of COVID-19 crisis, AFI members are working together and developing innovative financial solutions for young people. In this critical context, central banks and financial regulators have a key role promoting a youth and gender-sensitive regulatory environment to provide effective and affordable financial tools and financial education to shape better horizons for youth.

© Alliance for Financial Inclusion 2009-2022