What do Youth Savers Want?

After twenty years of research and practice on the subject, the economic development field finally seems to have accepted that poor people can and do save money. Yet for many development practitioners—as well as parents, teachers, and bankers—“youth savings” is still an oxymoron. Often these adults believe that young people—especially low-income youth—cannot save money because they simply do not have it.

And yet a look at data from financial institutions and NGOs around the world suggests the opposite. Many youth savings programs targeted at vulnerable adolescents have managed to open thousands of accounts. Some banks, typically offering youth savings accounts (YSAs) to a broader socioeconomic range of clients, have reached hundreds of thousands of youths.

The most common form of YSA on the market tends to be a regular savings account, often opened jointly with an adult custodian and featuring some kind of withdrawal restriction. While there are also many examples of innovative account features and complimentary services, available data yields no patterns as to which innovations result in higher numbers of accounts or balances. Nor has there been, until recently, much-documented evidence of what youth themselves say they want in a savings account.

What youth want was the question the YouthSave project set out to answer through four market studies involving almost 2500 respondents in Colombia, Ghana, Kenya, and Nepal. The research was conducted mainly with youth aged 12-18, but also included parents, teachers, and community leaders in recognition of the important influence of these groups over youth behavior. The research shows that, contrary to widespread adult perceptions, it is common for youth to obtain and manage money from at least the age of 12. Furthermore, the majority of youth respondents reported that they are already saving money on their own—albeit in small amounts, over short time horizons, and through informal mechanisms. Although prevalent savings practices fulfill some key youth needs and preferences related to saving, they also leave youth and their money vulnerable in a number of ways. 

This paper summarizes the most important findings common to all four market studies, although it should be noted that there were many nuances that were specific to each country. This summary is meant to provide those interested in designing youth savings accounts with a set of plausible hypotheses to prove, refine, or disprove for their particular populations of interest—a head start in designing market research to understand the savings needs of youth