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Youth Breakout - Justin Sykes, Silatech

Youth Breakout - Justin Sykes, Silatech






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  • National Microfinance Networks - Non Financial MFI Sector-focused support (Training to MFI staff in Financial Literacy, Enterprise Development and Mentorship) eg, YMN, EMFN etcApex Funds / Wholesale Financiers – Financial and T.A. M Sector-focused support (Structuring of Youth Financial Facilities providing credit, TA and client support to the MFI Sector e.g. Jaida, (Morocco), ADEN (Yemen) DEEP (Palestine)Correspondent Banking Models Postal Corporations, Money Transfer Operators, MFI windows in Agricultural BanksInnovation Media - TV Programming, Radio, SMSCompetitions, Graduation Schemes, Islamic FinancingTech Enabled Services
  • MFI lending is significantly below the youth demographic
  • Only one in five of MFIs clients is less than 30 years old: the bank could increase its lending to young people by more than 150%
  • RationaleFacilitate online engagement of Arab individuals in supporting youth economic activityCreate the world’s first Arab youth lending platformExtend into other forms of support e.g. donations

Youth Breakout - Justin Sykes, Silatech Youth Breakout - Justin Sykes, Silatech Presentation Transcript

  • #bwffconf Youth Financial Inclusion in MENA region Youth Financial Inclusion in MENA Enabling access to finance and stimulating growth region oriented enterprises Enabling access to finance and stimulating growth oriented enterprises Justin Sykes Silatech #bwffconf Building Women-Focused Finance 1
  • #bwffconf Youth: The regional context Context: The Arab World  A growing region… o Population of more than 375m in 2013 o Will grow 66% to reach 700m people in 2050  …that is poor… o Nearly 80-100m people earn less than $2/day  … very young… o Two out of three people are < 30 years old o Youth aged makeup 1/3 of the working age population .....where work scarce and future job creation is daunting o 17 million youth unemployed, let alone underemployed o 20m additional youth jobs will be needed  Entrepreneurship drives jobs o Many are entrepreneurs out of necessity, but entrepreneurs nonetheless o Strengthening economic opportunities for disadvantaged youth through self-employment yet key challenges remain Lowest levels of financial inclusion for MENA youth globally Strong existing bias against young people by FIs and society at large Weak supporting enterprise infrastructure Weak culture of investing in youth Building Women-Focused Finance
  • #bwffconf Youth Financial Exclusion: The data MENA youth (15-24) have the world’s lowest levels of financial access: 35 30 25 20 15 10 5 0 EAP SSA SA LAC Youth Adults Youth Adults Share saving at a formal financial Share borrowing from a formal institution financial institution WB Global Findex Database, Demirguc-Kunt and Klapper (2012) Building Women-Focused Finance ECA MENA
  • Catalysts to Achieve Scale in Youth Financial Access • Dedicated Youth Products by MFIs • Industry Partnerships - National Microfinance Networks - Apex Funds / Wholesale Financiers • Correspondent Banking Models - Postal Corporations, Money Transfer Operators • Innovation - Media - TV Programming, Radio, SMS - Competitions, Graduation Schemes, Islamic Financing • Tech Enabled Services Web Non-Financial and Financial - Mobile Non-financial and Financial 4 Building Women-Focused Finance #bwffconf
  • #bwffconf Dedicated Youth Products - Making the Business case to MFIs: The case of Morocco Number of Clients (column) 7000 6000 5000 Young Clients (20% of Total) Moroccan MFI: Client Age Profile Women Men %F % Women Clients (Line) 90% 80% 70% 60% 4000 3000 2000 50% Average Age is 42 years old 40% 30% 20% 1000 10% 0 0% 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 Client Age (Years) 5 Building Women-Focused Finance
  • Making the Business case to FIs: Cont. #bwffconf Morocco: Youth in the Working-Age Population 20,000 19,000 11,000 16,000 58% 12,000 Men 8,000 8,000 Women 4,000 4% 0 18-30 years 31+ years Total Working Age • Young people account for nearly two out of five people in the working age population in Morocco 6 Building Women-Focused Finance
  • Making the Business case to FIs: Cont. Active Clients MFI: Active Clients By Age & Gender Opportunity  MFI can increase the number of youth clients to 100,000 from the current 40,000 250,000 160,000 200,000 200,000 150,000 Men 80% 100,000 50,000 Women 20% 0 31+ years  Over their lifetime, these clients would become loyal customers of MFI whose value could be more than $25m Total Source: Silatech-Attawfiq diagnostic, July 2011 7  Youth could make up 40%+ of total active clients bringing MFI in line with market demographics  An incremental 60,000 clients meets a big social need – and is also a huge commercial opportunity 40,000 18-30 years #bwffconf Building Women-Focused Finance 7
  • Dedicated Youth Products Bodour Youth Loan Product - Morocco 8 Tawfir El Ghad Youth Savings - Morocco Building Women-Focused Finance #bwffconf Mashrou3i Start-up Loan Product - Yemen
  • Impact: Al Amal Bank’s focus on youth has driven explosive growth Youth Focus: Results Young People Served 60% 53%  22,500 youth microenterprises with loans 50% 40% Youth Clients % Total #bwffconf o First time access to finance 30% 20% 15% o 2,500+ start-ups 10% o 65% women 0% Before Silatech Support With Silatech Support o $4.8M lend out Business Growth 25 Thousands  12,500 youth with savings accounts Active loans 20 Total Active Clients Active savers o Asset for low-income youth 15 10 Silatech Support Yemen Crisis 5 0 2008 9 2009 2010 2011 Building Women-Focused Finance o Used by the entire family and cross-selling occurring o $750,000+ in deposits 9
  • Industry Partnerships National Microfinance Networks #bwffconf 9 7 20 5 3 YMN Yemen – Industry wide promotional campaigns, training and awareness raising events for members EMFN Egypt – capacity building, training and awareness raising events for members, tech transfer 10 Building Women-Focused Finance
  • #bwffconf Industry Partnerships - Apex Funds Youth Financing Facility – Morocco - Provision of LoCs, TA and BDS to the Moroccan MFI Sector - Pilot Islamic Financing Youth Financing Facility – Palestine - Provision of LoCs, TA and BDS to the Palestinian MFI Sector - Business Plan Competition - Advocacy Campaign - Musharaka pilot product 11 Building Women-Focused Finance
  • Correspondent Banking Models #bwffconf Youth Savings – Al Barid Bank, Morocco - Innovative youth product - Incentive scheme combined with financial literacy and social marketing - 1,800 post offices and retail outlets Youth Savings – Al Kuraimi, Yemen - Use of 100+ branches and money transfer agents including in remote areas Microfinance – Kaah Express, Somalia - Transformation programme with a priority focus on youth as clients - Use of several hundred money transfer agents - Existing clients and fund flow via Somali diaspora - Mobile Money via Zaad 12 Building Women-Focused Finance
  • #bwffconf Innovation - TV Programming - Radio Show - SMS Campaigns - Business Plan Competitions - Social Marketing - Incentive Schemes 13 Building Women-Focused Finance
  • Mobile – Non financial services: Tunisia case study #bwffconf Najja7ni M-Employment Service - Award winning m-learning and m-education services for Tunisian youth with services including; - career guidance - english language learning - financial literacy - entrepreneurship advice - SMS job matching solution - referral service - More than 800,000 users since launch in early 2013. - 68 % of subscribers use the service several times a week 14 Building Women-Focused Finance
  • #bwffconf Mobile – Financial services – Tunisia case study Mobi-RoSCA mobile platform that will enable the formation informal m-savings groups using basic mobile phones. Building on established community models of rotating savings and credit this solution will enable users to access their savings groups through USSD based interactive menus and content. Transactions will be performed using Tunisiana’s MobiFlouss payment solution 15 Mobi-Souk Virtual marketplace enabling businesses to connect with one another and buy and sell goods and services using basic mobile phones. This market access solution enables entrepreneurs to grow thereby creating jobs and stimulating the economy. Transactions will made through Tunisiana’s MobiFlouss payment solution Building Women-Focused Finance Mobi-POS Platform to link retailers with producers and large distributors using mobile phones. Benefits of this platform will include more effective inventory management, merchandise orders, MobiFlouss payment and access to credit. Mobi-MFI - Integration of MobiFlouss into Tunisian MFIs to automate loan disbursement/ repayment
  • #bwffconf Web Non-Financial Services Ta3mal Employability Portal - Web based one stop shop for youth looking for employment advice and support - Support to youth seeking wage and self employment - Self employment component includes: - financial literacy - enterprise training - introduction to microfinance - referral service to financial institutions with dedicated youth products - Site live in Tunisia and Egypt, under development in Iraq and Morocco 16 Building Women-Focused Finance
  • Web – Financial Services Kiva Arab Youth - Joint initiative between Silatech and Kiva to boost lending via Kiva in MENA - Launched regionally in March 2012 - Lending to youth in 6 Arab countries - Silatech loan matching and social marketing to increase interest and investment through Kiva - In 18 months.. - 100,000+ lenders - 3,600 youth borrowers - $4.1M in funding - Large social investments raised - Kiva Arab Youth is evolving…… www.kiva.org/arabyouth Building Women-Focused Finance #bwffconf
  • Web – Financial Services Cont. 18 Building Women-Focused Finance #bwffconf