Youth Savings Has Multi-Generational Impact

March 18, 2019


Women’s World Banking knows from its research that youth are already saving from the pocket money they receive from parents or relatives, or money from odd jobs at different times of the month or year. Yet engaging youth to use formal financial services remains a challenge. Women’s World Banking partnered with NMB in Tanzania to roll out youth savings products and financial capability training that would teach and inspire young people to save in their own accounts. Women’s World Banking measured the impact of the financial capability training on youth and parents revealing interesting results on the financial wellbeing of young people and their families.   

Women’s World Banking and NMB worked together to develop the WAJIBU—meaning responsibility—youth savings proposition. It included a suite of three savings accounts designed to serve youth at every stage of their lives and to help parents and youth conveniently save and manage money, independently or together, toward their goals.

Of the three account types, NMB Chipukizi Akaunti was particularly unique. It was the first account of its kind to be introduced in Tanzania, allowing teens ages 13-17 to manage their own accounts in their own names.

In tandem with the rollout of these new accounts, financial capability training with youth and their parents were introduced. Women’s World Banking conducted a quasi-experimental design to look at the impact of financial capability training on youth and their parents. The findings reveal promising results for youth-focused work and its impact on the financial wellbeing of young people and their families.

The Impact on Parents:

  • Parents in households that attended financial capability training are spending significantly more time with their children. Notably, there was a significant increase in parents guiding their children on financial matters.
  • On knowledge, attitudes and practices, parents in households that attended the training had a statistically significant increase on the use of a bank as a savings channel. They also showed increased awareness on mobile money as a savings mechanism, though they use it more for financial transactions rather than long-term savings.
  • Parents in households that attended the financial capability training reported increased financial wellbeing in individual and household outcomes; including a considerable decline in the frequency of issues such as skipping a meal, lack of medical treatment, children going without medicine and not being in school due to lack of school fees.

The Impact on Youth:  

  • For those youth who attended the training, there was a significant increase in the proportion of those who were saving. There was also an increase on the share of money saved by the youth.
  • The proportion saving in a bank also increased for those who attended training; though it was not significantly different from the control group. The proportion of youths who claimed to have visited a bank for information from bank officials also increased significantly.
  • Youths see parents as source of information on financial capability, and some see the role of savings as part of parental responsibilities. After the training, some youth started educating their parents on the importance of saving in financial institutions.

Youth who attended one of the financial capability trainings said that their main takeaways were understanding the importance of savings and having an increased understanding of how to open the targeted accounts. While 73 percent asked their parents to open an account, only 19% reported having actually had the accounts opened for them. Meanwhile, 32% of parents in households that attended the training opened an account, and, importantly, the likelihood of opening an account was higher where the parent attended as opposed to just the child or spouse. These findings speak to the power of financial education across generations when it comes to changing the behavior of an entire household.

Inspiring the next generation of savers is a critical step in our move toward financial inclusion, especially when young people can inspire their families to form better saving habits that benefit the whole family. We now must do our part in making sure financial products exist to serve them and that educational resources are available to show them how.

This project was supported by FSD Africa, funded with UK Aid from the British people.