On Wednesday, March 12th in celebration of Global Money Week 2014, we co-hosted with Child and Youth Finance International (CYFI) a webinar that explored how microfinance can be more inclusive to children and youth. A small but increasing number of MFIs now offer financial and non-financial services to children and youth. By doing so, they are building the next generation’s capability to save, build assets and, if needed acquire microloans to support their livelihood activities.
The webinar featured Mr. Walid Ahmed from BRAC Maendeleo Tanzania, , who presented on the “Empowerment and Livelihoods for Adolescents” program, which works to socially and financially empower youth (age 11-19), mostly girls, through a combination of life skills education, livelihoods training, financial literacy, credit support, club activities, and community participation. Taking from the example of BRAC, some key challenges around child and youth inclusiveness of microfinance were discussed with Mr. Larry Reed, Director of the Microcredit Summit Campaign. As the Campaign focuses on ending extreme poverty, what is the role of financially including children and youth?
- If microfinance becomes more inclusive to children and youth, we can ensure economic opportunities for the next generation.
BRAC Tanzania’s ELA Program – Mr. Walid Ahmed
- BRAC has reached 2.6 million men, women and children in rural communities of Tanzania and works in 18 regions out of 30.
- Not only does the ELA program focus on financial empowerment and livelihood training, but the girls also partake in a number of activities that focus on social issues (early marriage, gender discrimination, reproductive health, drug abuse, HIV/AIDS, violence, coping with stresses, nutrition) and community engagement.
- The Financial Literacy Training of the ELA program includes a 7 day curriculum of business planning, budgeting, capital management, marketing, customer service, profit and loss, savings and record keeping.
- Only until these girls have passed through this program, are they eligible to apply for a microfinance loan. These are typically under $100 and the clubs serve as a support group for those girls who have started a business.
- Key learnings: The peer-to-peer livelihood education model is very effective, the dialogue sessions between mothers and girls has helped strengthen relations and community ties, life skills training (critical thinking, negotiation etc.) has helped significantly in developing the girls’ confidence and leadership ability, the financial literacy training model has been effective in helping the girls manage their cash flow effectively, & the weekly group meetings has helped very much helped strengthen what was learned during the training.
- Key challenges: Sustainability of the ELA activities – because of the number of components aside from microfinance funds are scarce, girls’ migration – a current phenomenon in Tanzania meaning participants are not always steady in the program, scaling of the ELA in general.
- Looking forward: Building partnerships to ensure the long-term activities of the program, building in participation by community members and the government, publishing new story books, working with pre-primary and primary children to integrate them into the future adolescent program.
Discussion – Mr. Bram Stoffele, Mr. Larry Reed and Mr. Walid Ahmed
- Larry: Movement out of poverty is a generational journey – the parents have access to finance, stabilize their lives but then put their investment in their children. Its thus the children who often benefit and its the children’s future household that becomes the one to move out of poverty.To support that generational change, its important that children learn about finance, how to manage money well and have access to financial services so that as they grow they can make educated decisions about their own livelihoods for a better life.
- Larry: For MFIs, working with children and youth is making a long-term investment. As far as savings, people tend to not change banks often throughout their lives. By working with young people, you create a life-long customer which then helps the MFI bottom-line. Looking at this as an investment, it is one that pays off over a generation.
- Larry: Its been found that financial literacy or capability training works best when it is combined with current use of financial services.
- Larry: Encouraging savings among young people can be challenging, but successful programs have used incentives structures such as small rewards or gifts based on amounts in their accounts.
- Larry: When you work with youth, you need to start where they are. You can’t take an adult curriculum and give it to young people – its most likely they haven’t worked with money before and it has to be adjusted to their needs and actively engage them.
- Walid: Money won’t bring happiness. While access to capital may provide the ability to create a livelihood – there are other problems impeding the quality of life of young people in poverty which is why BRAC takes an integrated approach that tries to work with the community and address the social issues young people, especially girls, may face.
BRAC Maendeleo Tanzania announces their Campaign Commitment! Learn more about it here
We welcome your comments and any questions that came up during the webinar!
What are Campaign Commitments and how can you join the movement to help 100 million families lift themselves out of extreme poverty? Check out our Commitment Development Toolkit.