Event picture from adig.org

By Alejandra Montes & Catherine Rodriguez Orgales, Save the Children & Universidad de los Andes

The first Child and Youth Finance International Regional Meeting for the Americas and the Caribbean took place last month in México City. The meeting was led by Jeroo Billimoria, Executive Director of Child and Youth Finance International, and was attended by 132 people from 17 countries including senior government representatives, financial regulators, business leaders, scholars, and NGOs. The meeting had one objective in mind: Share the best practices in order to increase financial access and financial education for children and youth in the region.  Here are some takeaways from the conference which we think provide interesting food for thought both for YouthSave partners and other practitioners:

1. Almost all Latin American countries have already established or are working towards the formulation of a national strategy for financial education and a strong need exists to implement financial education as a mandatory subject into the national curriculum. In Paraguay, for instance, financial education was integrated within the social sciences curriculum for primary school and within the economics and public management curriculum for secondary school, while in Peru it was incorporated in the areas of history, geography and economics. The potential for scale in this solution is enormous – far beyond what could be achieved through the initiatives of NGOs and other types of providers.  Still, it is unlikely that all youth would be evenly covered by school-based strategies, or with the needed intensity. NGOs and other providers may thus have a different role to play, such as supporting the education community and local schools to deliver the financial education content with quality, complementing the delivery of financial education through informal mechanisms such as SMS or edutainment, supporting monitoring and evaluation, or working in advocacy at the policy level.  

2. The need for the financial system to design and promote financial products suitable for children and youths. Without the opportunity for the kids to put into practice all that is learned in financial education programs, the impact of these initiatives will not reach their full potential. If children and youth have access to these services, they will hopefully build the habits needed in order to achieve a successful pattern of savings and asset accumulation in adulthood. Two important challenges are faced here. The first one, of immediate concern for YouthSave, is the need to design a product that is attractive to both the financial sector and the children. The second one is to design a strategy to increase the penetration of such products. For instance, in Colombia, nearly every bank in the country has some type of account targeted toward children. However, taken altogether it is estimated that less than 6 percent of youth have access to the financial sector and are using these accounts.

3. Parents and teachers are key actors and need to be involved actively in any type of financial education program for children, especially if schools become the primary delivery channels for content. This has been an interesting challenge particularly for YouthSave in Colombia, because even though we use our own facilitators to hold financial capability workshops in schools, we´ve observed that a large number of teachers have a negative image of formal financial institutions and state they rarely save. With respect to parents, informally we´ve seen low levels of money management skills as well as low savings levels. Thus, it´s critical to think how to re-shape the attitudes and knowledge of the adults that are in direct contact with children and specially  the teachers, before considering them as the main channel for financial education.  

4. Government interventions needs to complement youth focused financial strategies. It is necessary to reform the current legislation in several Latin American countries, which today does not allow minors to open or operate bank accounts by themselves. Some countries in Latin America are already working on such an agenda. Colombia, for example, will launch its National Program for Financial and Economic Education by the end of October 2012, in which the Ministry of Finance, Ministry of Education and the Central Bank – among other government agencies – have all taken part in its design. Nonetheless, this region is still far behind in financial education and inclusion of children and youth. However, a detailed action plan needs to be developed in which all the players such as government officials, school directors, teachers and parents need to be organized to set up and implement such a program. Of equal importance, the adequate type of program needs to be designed. Previous experience has taught us that the success of financial education programs crucially depends on its careful design, which should take into account the specific needs and characteristics of each target population.

5. Providing life skills training along with financial education is fundamental. There was a strong argument from different actors about the importance of providing the tools for children to become empowered and capable economic citizens. Alvaro Modernell, founder of Mais Ativos Brazil, stated that we should teach children that money is in the service of people and its main objective is to increase the quality of life, rather than just to make people rich.  Similarly, Marco Antonio Rodriguez from Peru´s Ministry of Education pointed out the need to understand financial education as a fundamental right.  Save the Children and other rights-based organizations are in a good position to undertake this challenge, as most of the financial education programs already include ethics and life skills training, to different degrees.

Meetings like this one in Mexico City provide a good setting to share best practices and discuss opportunities and challenges that lie ahead. Other Child and Youth Finance International Regional Meetings will be conducted in Africa, Asia and the MENA region before the end of the year. We look forward to hearing the experiences of colleagues who attend, in order to learn about different takeaways and common perspectives that are being adopted in other regions. 

11/12/2012

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