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IFAD, 2015, Lessons learned Youth access to rural finance: Inclusive rural financial services, General background document on issues in our research matrix, Lessons Learned series is prepared by the IFAD Policy and Technical Advisory Division, IFAD, Rome.

2.3 DIRECT ACTIONS IN COMMUNITIES

2.3.2 Entrepreneurship: Capacity strengthening on economic activities

Recommendation: 23. Consider including older more experienced youth to mentor younger and less experienced youth.

Reference: IFAD, 2015, Lessons learned - Youth access to rural finance: Inclusive rural financial services, General background document on issues in our research matrix, Lessons Learned series is prepared by the IFAD Policy and Technical Advisory Division, IFAD, Rome.

Evidence sample: The analysis showed that mentoring programmes with experienced business owners can build the business and financial skills of young entrepreneurs and farmers. 
The mentoring from experienced business owners or farmers can further develop the financial and management skills of young people to access the financing needed to start or grow a business.

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2.3 DIRECT ACTIONS IN COMMUNITIES

2.3.3. Information Technology (IT) and enhancing of livelihoods of people dependent on the IE

Recommendation: 3. Be aware in designing IE related projects that using mobile technology can be a good and realistic option for providing technical support to youth and others dependent on the IE. Note that the use of technology and mobile phones has the potential to reduce project costs, for example with regard to micro-finance management. It may also reduce training and mentoring costs since no continuous direct personal physical interaction is required.

Reference: IFAD, 2015, Lessons learned - Youth access to rural finance: Inclusive rural financial services, General background document on issues in our research matrix, Lessons Learned series is prepared by the IFAD Policy and Technical Advisory Division, IFAD, Rome.

Evidence sample: The assessment noted that mobile ownership data of young people across the developing world indicates that they own or have access to mobiles at rates that are nearly equal to or greater than the rates for adults.

The assessment further refers to other studies that found that use of technology and mobile phones for product delivery also has the potential to reduce costs. A Consultative Group to Assist the Poor study on branchless banking showed, for example, that using mobile technologies can be, on average, 19 per cent cheaper than branch-based banking. The evaluation notes the promotion of innovation of mobile banking to facilitate access and usage in rural areas that have limited availability of financial services. Innovation can be achieved in collaboration with the private sector, including FSPs and mobile network operators

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2.3 Direct actions in communities

2.3.5 Micro finance

Recommendation14. Combine financial education and life skills training with financial services to increase impact of support to young people dependent on the IE.

References: IFAD, 2015, Lessons learned Youth access to rural finance: Inclusive rural financial services, General background document on issues in our research matrix, Lessons Learned series is prepared by the IFAD Policy and Technical Advisory Division, IFAD, Rome.

Evidence sample: Several studies noted that It has become inclusion of education such as financial education and life skills training combined with financial services for young people can have a positive impact, including improved savings.

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2.3 Direct actions in communities

2.3.5 Micro finance

Recommendation22. Encourage the growth of a good savings balance after accounts are opened as it is critical for business sustainability.

Reference: IFAD, 2015, Lessons learned Youth access to rural finance: Inclusive rural financial services, General background document on issues in our research matrix, Lessons Learned series is prepared by the IFAD Policy and Technical Advisory Division, IFAD, Rome.

Evidence sample: The analysis found that encouraging the growth of savings balances after accounts are opened is critical for sustainability. While account opening by youth is a significant hurdle in itself, encouraging young people to continue depositing into their account and grow their savings balance is just as challenging and important.

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2.3 Direct actions in communities

2.3.5 Micro finance

Recommendation24. In designing micro finance programming with youth, take a life cycle approach to develop approaches that are relevant and appropriate at different stages and transitions of a young person’s life.

Reference: Kasprowicz, P., and E. Rhyne. 2012. Looking through the Demographic Window: Implications for Financial Inclusion. Washington, D.C.: Center for Financial Inclusion at Accion. In: Lessons learned Youth access to rural finance: Inclusive rural financial services, General background document on issues in our research matrix, IFAD 2015, Rome.

Evidence sample: The analysis indicated that financial needs and uses of financial services evolve over a person’s lifetime. A life cycle approach can help design projects that are relevant and appropriate at different stages and transitions of a young person’s life.

This includes designing financial products for different life stages (starting with savings for minors) and for different rural financial needs (farm and non-farm).

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2.3 Direct actions in communities

2.3.5 Micro finance

Recommendation25. Invest in innovations and share the successes of youth access to a variety of financial services while also building the capacity of financial service providers to design and deliver viable financial products for rural youth.

Reference: IFAD, 2015, Lessons learned Youth access to rural finance: Inclusive rural financial services, General background document on issues in our research matrix, Lessons Learned series is prepared by the IFAD Policy and Technical Advisory Division, IFAD, Rome.

Evidence sample: There is a clear need to invest in innovations and share the successes of youth access to a variety of financial services while also building the capacity of financial service providers to design and deliver viable financial products for rural youth.

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2.3 Direct actions in communities

2.3.5 Micro finance

Recommendation26. Be aware in designing micro finance support with young people that they often do save and/or borrow already. Their sources of income might be small and irregular. When they save they often do so in unsafe places. They borrow, most often informally, to start a business but also to continue with their education. They want access to formal financial services that can better meet their growing needs.

Reference: IFAD, 2015, Lessons learned Youth access to rural finance: Inclusive rural financial services, General background document on issues in our research matrix, Lessons Learned series is prepared by the IFAD Policy and Technical Advisory Division, IFAD, Rome.

Evidence sample: The analysis indicates that young people do have access to money, though their sources of income might be small and irregular; they do save, often irregularly and in unsafe places; they do borrow, most often informally, to start a business or continue with their education; and they do want access to formal financial services that can better meet their growing needs. Market research studies and demonstration projects conducted over the past several years across different continents have demonstrated that youth do have the capacity to save (SEEP, 2013).

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2.3 Direct actions in communities

2.3.5 Micro finance

Recommendation27. When designing programming for micro finance with youth, promote the establishment and tapping into formal savings accounts prior to using other types of financial services, especially loans. This savings-first approach builds young people’s capacity and confidence in using formal financial services and serves as a basis for building assets for the future.

References: Kilara, T., and A. Latortue, 2012. Emerging Perspectives on Youth Savings. Focus Note 82. Washington, D.C.: CGAP. Kilara, T., B. Magnoni, and E. Zimmerman. 2014. The Business Case for Youth Savings: A Framework. Focus Note 96 in:  IFAD, 2015, Lessons learned Youth access to rural finance: Inclusive rural financial services, General background document on issues in our research matrix, Lessons Learned series is prepared by the IFAD Policy and Technical Advisory Division, IFAD, Rome.

Evidence sample: The analysis showed that prior experience has shown that young people need to tap into formal savings accounts prior to using other types of financial services, especially loans. This savings-first approach builds young people’s capacity and confidence in using formal financial services and serves as a basis for building assets for the future.

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2.3 Direct actions in communities

2.3.5 Micro finance

Recommendation29. Be aware that there is emerging evidence that youth have the capacity to repay loans and that youth loans are not riskier than adult loans.

Reference: IFAD, 2015, Lessons learned Youth access to rural finance: Inclusive rural financial services, General background document on issues in our research matrix, Lessons Learned series is prepared by the IFAD Policy and Technical Advisory Division, IFAD, Rome.

Evidence sample: The analysis indicated that there is emerging evidence that youth have the capacity to repay loans and that youth loans are not riskier than adult loans. The authors noted that youth loans continue to be very limited. Despite some of the innovations and emerging evidence on the viability of youth loans, FSPs remain reluctant to offer youth loans at scale because youth are still perceived as being too risky. This creates a vicious cycle, where a lack of large demonstration projects prevents more extensive evaluations of effective mechanisms for offering credit to young people.

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2.3 Direct actions in communities

2.3.6. Vocational education/skills training

Recommendation2) In project design take into account that not all youth have the inclination or aptitude to become self-employed, so any type of training needs to be sensitive to youth preferences and capacities. Determine preference for self-employment or employment working for others when enrolling youth in programmes. Be aware that their preferences may also change over time.

Reference: IFAD, 2015, Lessons learned Youth access to rural finance: Inclusive rural financial services, General background document on issues in our research matrix, Lessons Learned series is prepared by the IFAD Policy and Technical Advisory Division, IFAD, Rome.

Evidence sample: The meta analysis indicated that there is consensus that not all youth have the inclination or aptitude to become self-employed, so any type of training needs to be sensitive to youth preferences and capacities.

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Valentina Corbucci
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19 June 2018

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