Reaching Scale with Financial Education for Youth

"Appropriate financial and nonfinancial services (such as education and training) can help youth better manage their finances in the short term and develop responsible financial habits in the long term."

This case study considers the role that financial education for youth aged 8 - 18 can play in scaling up youth financial services by examining the experiences of Hatton National Bank (HNB) in Sri Lanka and XacBank in Mongolia. Although these institutions differ on many levels, they have both found that financial education for youth can help with their dual missions of business growth and corporate social responsibility. The report includes two case descriptions of the youth financial education programmes offered by these two institutions, exploring their design, content, segmentation, intended groups, and delivery methods. In particular, the case study focuses on how providing appropriate financial education services can ultimately contribute to scaling up financial services for youth.

For example, HNB introduce a branded savings product for clients under the age of 18, which subsequently led to the establishment of HNB banking units in schools. HNB's school banking units are operated by student managers who are selected and trained by bank staff. Before the school year begins, they receive 3 days of training at a bank branch, where they learn to do basic account opening procedures, cash collection, passbook management, basic marketing, and cash management. By the 1990s, HNB was delivering financial education to both in- and out-of-school children and youth. In order to formalise its financial education programme, HNB commissioned market research in 2011 with in-school youth aged 13-18 and young entrepreneurs aged 18-25; it included both customers and non-customers of HNB. Focus groups were conducted with parents and teachers. (Table 5 on page 8 of the paper summarises the key findings of the research.) What emerged: ideas for an expanded programme that will include, amongst other things, giving youth aged 12-17 the option of receiving a fixed financial education curriculum, which will be taught by HNB's microfinance field officers and teachers after school hours. The financial education training will be held for one-and-a-half hours on every Friday for a continuous period of 5 weeks.

An excerpt from the report follows, courtesy of "Innovations in Youth Financial Services Practitioner Learning Program" and The SEEP Network (footnote numbers removed by the editor):
"The following recommendations are based on the experiences of Hatton National Bank and XacBank as they work to scale up their financial education activities for young people. Recommendations are divided into two sections: (1) design and (2) delivery of effective financial education programs.

Designing Effective Financial Education Programs for Youth

1. Understand your organization's motivation for offering financial education....In the cases of XacBank and HNB, both banks identified financial education as an important way to create demand for their youth financial products while positively contributing to their societies...
2. Begin financial education for youth at an early age....HNB's financial education curriculum has been structured to provide financial education to clients as young as possible - ideally, on the child's first day at school....XacBank's market research demonstrated that children as young as 9 years old grasped key concepts in financial education and showed rapid behavioral change in connection with respect to savings and other financial activities...
3. Involve key adult figures in youth financial education...[HNB] has found that involving parents, teachers, principals, and government officials in its youth financial education programming results in a significant positive impact. Parents are more comfortable allowing their children to participate in such lessons when they understand the content themselves. In addition, adults who benefit from learning about positive financial behavior are likely to steer their families towards relationships with trusted financial institutions that provide such programs. XacBank also seeks parental involvement and buy-in for its financial education programs....After the pilot stage of one of XacBank's recent financial education programs, they held focus groups with parents and found that they had almost universally positive reactions to the education in which children had participated. Parents stated that their children discussed their new knowledge of saving and budgeting with siblings and family members and that sharing this information was valuable for the entire family.
4. Tailor youth financial education programs to different segments of the youth market....The content, activities, and delivery methods differ for each group: games and activities are emphasized with younger groups, with more content-oriented sessions reserved for older youth. Although age is not the only way that organizations can segment youth financial education programs, it is often easier to group young people in this way when delivering services in conjunction with local schools. However, examples of other possible segmentation options include rural and urban youth, males and females, and youth in and out of school...
5. Maintain programmatic continuity as youth age....Financial education programs that target youth at an early age and develop over time to include more sophisticated topics as youth grow older also help deliver appropriate messages to different youth segments while maintaining continuity. In addition, both XacBank and HNB have observed that youth needs can change rapidly. Youth may suddenly find themselves in a position where they need to contribute to family income or require savings for a major life change, such as graduation, marriage, or childbirth. Financial education programs for youth must accommodate these rapid changes, while continuing to build on existing knowledge and skills acquired either through experience or earlier training.
6. Conduct market research and pilot programs prior to scaling up....Young people were surveyed and interviewed to determine their existing level of financial knowledge and level of demand for financial education. Research was also conducted with parents, teachers, and other adult stakeholders to create buy-in for the future financial education programs, as well as to assess their level of comfort with having children learn about money. Finally, HNB and XacBank used the market research process to explore the availability and capacity of potential partners who could support the delivery of financial education. After initial market research was completed, a pilot phase was essential...
7. Consider linking financial education to specific financial products....In addition, both training programs include school visits by bank personnel to familiarize young people with bank staff and basic bank operations.

Delivering Effective Financial Education Programs for Youth

1. Leverage effective partnerships....Cultivating strategic partners achieves the buy-in of essential stakeholders, including government ministries, education systems, and local and international NGOs [non-governmental organisations].
2. Manage employee expectations and workloads....In some organizations, existing staff may be well suited and able to take on the responsibility for delivering financial education while in other organizations, it is more appropriate to either outsource delivery to a partner or hire additional, specialized staff...
3. Utilize technology to reach youth clients....XacBank is currently conducting research on a mobile bank service for child and youth savings products....In addition, XacBank is creating a multimedia financial education program that can be used with young people in remote areas; the program combines video, PowerPoint slides, and computer graphics. Hatton National Bank is also considering a mobile telephone network as a financial education tool in addition to looking at ways to deliver savings tips and loan advice via text message. In the future, HNB hopes to include a dedicated page for youth on its website through which financial education will be delivered.
4. Regularly evaluate effectiveness....Pre- and post-training evaluations are...an important part of the ongoing financial education programming of both Hatton National Bank and XacBank. Such evaluations can be used to assess the quality and efficiency of training and changes in the behavior and attitudes of both teachers and students..."