From 2011 to 2014 around 700 million people around the world opened accounts at some type of financial institution or service provider. The result was a 20 percent decrease in number of unbanked individuals in the world. While an increase of 700 million people is significant, two billion adults worldwide still lack access to financial accounts and services.
One way to attack this problem over time is to start early, getting young people oriented to opening bank accounts and saving money. But it will require some serious work. According to the U.N., young people are 44 percent less likely to park their savings in a formal financial institutions as compared to adults. The bulk of the world’s unbanked population live in low-income countries and developing economies. And nearly 90 percent of the global youth population live in poor countries as well.
The global dialogue about the importance of bringing children and young people in financial inclusion landscape has grown over the past few years. In 2011, a group of like-minded individuals and organizations got together to take the lead in the movement to form Child and Youth Finance International (CYFI).
Located in Amsterdam, Netherlands, CYFI concentrated its efforts throughout that first year on expanding the Child and Youth Finance Movement. Activities included developing the Introduction to Child and Youth Finance Education document and the certification document for Child and Youth Friendly products. CYFI also went to work creating national platforms on the importance of including young people in financial inclusion efforts and speaking on the matter at a number of high-level conferences.
While CYFI did receive some money from the Dutch government, a couple of key U.S.-based funders provided early financial backing. Among the biggest funders that inaugural year was the Skoll Foundation, which gave CYFI a grant for over €213,000.
The Skoll Foundation’s name doesn’t come up a whole lot in global financial inclusion circles. I wouldn’t say it’s a big backer of financial inclusion projects—microfinance, entrepreneurship, and finance tech to benefit the world’s poor are more in Skoll’s wheelhouse. Regardless, Skoll is one of CYFIs biggest U.S.-based backers, having awarded the outfit close to €285,000 since 2011.
The Citi Foundation also hopped on board here with a €34,000 give. Both awards were made via subcontract though Aftaloun Child Savings International.
The Citi Foundation is a major player in the financial inclusion arena. To date, the foundation has made around 600 grants out of its Financial Inclusion program. In addition to making the formal financial system and its products more accessible, the program is taking its efforts a step farther by highlighting the importance of “financial capability, the ability to establish financial plans, and develop strategies for preserving a strong financial position during times of both economic prosperity and instability,” as a critical component in the overall economic stability of people and communities.
Through 2015, around half of the Citi Foundation’s program grants totaling close to $50 million have gone to support global financial inclusion efforts, particularly in Latin America and the Asia Pacific and the Europe, the Middle East, and Africa (EMEA) regions. From 2011 to 2015, the foundation has provided nearly €150,000 in grants to CYFI.
Of course, it’s hard to talk about global financial inclusion without mentioning the MasterCard Foundation, which came on board here in 2012 with a to €148,000 grant in 2012.
MasterCard’s Financial Inclusion program broadly seeks to expand “access to financial services to people living in poverty, particularly those in rural and remote areas,” mainly in Africa. The foundation’s strategy includes building financial services use and capacity, increase the finance industry’s ability to service the needs of poor populations, back mobile money services, support and promote savings groups, promote agriculture finance and data acquisition, and leverage financial inclusion partnerships.
While the foundation doesn’t have a big youth bent in its financial inclusion giving, it does have a pretty youth-heavy focus in many of its other giving programs and initiatives, mainly related to helping young people in Africa find jobs, get an education, and obtain skills training. The push here is to help lead young people out of the generational cycle of poverty and toward increased economic security. None of this means that MasterCard is out of the child and youth financial inclusion game. From 2001 to 2015, the foundation awarded CYFI nearly €1 million in grants. MasterCard Worldwide—completely separate of the foundation—has also pitched in with over €100,000 in funding.
Finally, a handful of other nonprofits like the NYSE and Levi Strauss foundations have offered support at times to CYFI, while companies like Ernst & Young and Deloitte have pitched in with pro bono services.
It’s been a handful of years since CYFI was established, embarking on a mission to reach 100 million children in youth in 100 countries by 2015. With the help of key supporters and partners, CYFI is evolving its strategies to continue to influence and inform policymaking and grow as thought leaders and change makers in the child and youth financial inclusion landscape.
So far, there's still not a ton of funding in this arena, but it's building. It's worth noting that the push in the United States for children's saving accounts and financial literacy has taken many years to gain steam. In that case, it's been key to have funders in for the long haul, like Benita Melton at the Mott Foundation. We'll see what kind of staying power the global funders of youth financial inclusion turn out to have.