November 7, 2018 – Hotel Africana, Kampala.
The Initiative for Youth Empowerment and Transformation (IYET) in partnership with the National Youth Council (NYC), co-hosted a Multi-Stakeholder Workshop on Youth Financial Inclusion on November 7, 2018. Being part of several strategic actions designed to mobilize multi-stakeholder support for youth financial inclusion, the workshop focused on generating strategies and approaches to address challenges limiting youth participation in the financial sector with a focus on youth in agriculture. Avenues to increase opportunities and capability for economic activity were also explored in the discussions. The report highlights the Outputs of the day. It gives the key issues that emerged, summarizes the takeaways recommendations as well as the next steps thereof.
Overall, the workshop aimed at contributing to improved youth financial inclusion, specifically by:
The event covered various topics relating to financial inclusion. They included: (1) Policy and Regulatory Environments; (2) Demand and supply challenges and opportunities; (3) Digital Pathways; as well as (4) Leveraging technology; all for financial inclusion.
Moderation – Dr. Ahmed Hadji
The moderator – Dr. Ahmed Hadji – welcomed the participants and called the meeting to order. He applauded the participants for coming from far and wide to attend the dialogue. This, he said, signified the much importance that they attach to the youth of Uganda in general but most importantly to the efforts of promoting financial inclusion of this population segment which is the biggest of Uganda’s population. Therefore, enrolling youth into the financial sector means rolling out the services to the wider population and hence speeding up the entire economy.
Basing on the IYET goal and objectives, Dr. Hadji gave highlighted why it was crucial that each one needed to partake in all the day’s engagement. He called on all the stakeholders present to be good ambassadors back in their respective government departments, development partner agencies and districts. This is crucial, not only to the success of IYET but to the sustainability of its achievements in the long run. He gave an overview of the day’s program and the procedure after which he then invited the Chairman IYET – Mr. Francis Kisirinya – who made introductory and welcome remarks.
Starting by sharing his personal experience as an example, Mr. Kisirinya highlighted the difficulty in accessing financial services for the youth especially when it involves loans. Mr. Kisirinya had a good and long track record dealing with a particular bank (not mentioned here) with which he had been borrowing and effectively servicing his loans. Up until recently, he had borrowed up to the tune of well about Ugx 300m. However, recently, when he wanted to borrow Ugx 27m only he still had to undergo thorough scrutiny, back and forth documentation and approvals. It took 3 weeks before he could get the funds. If this is true for someone with such an impeccable reputation with the same bank, how uphill is the task for a youth with limited experience and financial capacity to access such services he decried!
He added that with only 4000 absorbed of the 700,000 youth entering the labour market annually, financial inclusion requires a concerted and sustained discourse and effort. On that note, Mr. Kisirinya reiterated the need to identify drivers and evidence gaps for youth participation in the finance sector and to explore pathways for effective and efficient access to financial services. He emphasized team work, networking and sharing of experiences and technical resources including evidence-based findings and advocacy to push the noble cause forward.
As an outcome of the dialogue, Mr. Kisirinya tasked participants to come out with practical recommendations for action. He then introduced members of IYET and declared the dialogue officially opened.
In his remarks, Mr. Ekima emphasized the fact that for the youth to be financially included, they need to be economically active in the first place. He commended government for the ongoing youth empowerment programmes. However, he pointed out that owing to the heterogeneous nature of the youth, i.e. schooled vs unschooled, urban vs rural and sometimes skilled and unskilled; the programmes need to be tailored to address the diversities. He raised, as an example, that under the operation wealth creation (OWC), many youths who received heifers failed to look after them for several reasons including limited logistical resources among others. He advised that any programme geared towards youth development should consider starting at the resources and knowhow that the youth have and support them towards improvement.
While Mr. Ekima was cognizant of the fact that youth prefer white color jobs to agriculture, he expressed optimism that the youth are energetic and are willing to work if agriculture is made attractive. At this point – giving an example of the Kenyan experience where government ensures that 30% of government contracts are offered to youths – he called on to government to consider some radical actions for youth inclusion in economic activity. He also called on to the bank of Uganda, commercial banks and other financial institutions to consider favourable interest rates to address the currently high rates which are prohibitive to youth inclusion. He urged all the participants to consider advocating for these concerns.
The Minister of State for Finance, Planning and Economic Development (Micro-Finance) – Hon. Kyeyune Haruna Kasolo, was scheduled to perform the official openning ceremony. However, due to an urgent call to state house he could not make it to the dialogue. This was followed by the Key Note Address delivered by Hon. Okello Bonny the member of parliament of Kole North.
Hon. Bonny thanked organizers and development partners and appreciated the cause for such efforts. As a former youth leader in the national youth council, he is one of the youth who has been advocating for similar issues while he was the youth chairperson for Kole district. Now that he is a parliamentarian and sits on the parliamentary committee on youth affairs, he pledged to sustain the voice of these and similar concerns on behalf of the youth of Uganda. He proposed pooling all youth development funds into a National Youth Bank.
He encouraged the youth not to shun starting small. It is the best way to start because even when you lose you lose small, but when you start succeeding, you have lots of experience that catapults you to bigger engagements and complex businesses.
He called on to the youth to grow a saving culture to be able to start investments. He added that they should not bank much on the entitlement mentality but take situations in their hands, address challenges and solve problems. The youth should use their right to define what they are, what they want to become. He reminded the youth to utilize their energy and inquisitiveness to work towards their dreams and goals since being a youth is just a transition. He urged them to responsibly participate in engaging stakeholders and holding government and other leaders accountable for the resources and promises they make for the development of the country
Expert presentations were made to give participants general overviews of previous, ongoing and evidences surrounding youth, their economic participation, the entire blend of socioeconomic, as well as law and policy environment to stimulate fruitful discussions. Below the report summarises the presentation and emerging issues.
Understanding the Policy and Regulatory Environment on Youth Financial Inclusion – Ssanyu Rebecca, DRT.
The presentation is added in the list of annexes.
It defined Youth Financial Inclusion as a process of ensuring access to appropriate financial products and services needed by vulnerable groups (youth) at affordable cost in a fair and transparent manner by mainstream institutions (OECD). It also discussed the usage, Affordability and Quality of financial products and services. This presentation gave a common understanding of the policy environment determining how youths are targeted and participate in the financial sector. Specifically, the presentation highlighted;
The policy frame work available to include;
In addition, there are frameworks addressing youth financial inclusion;-
About affordability and usage of the financial services, he pointed out the limitations of age by law. He expressed concerns that apart from savings, financial institutions are dragging their feet on expanding other services to youth such as access to credit and loans, and or educational services for financial literacy.
Youth Financial Inclusion: Opportunities, Challenges and Strategies – Joseph Nsaale Buyondo – FBMS
Financial inclusion matters not only for promoting growth, but because it helps ensure prosperity. Indeed access to financial services is critical in lifting people out of poverty, in empowering women, and in helping governments deliver services to their people. He noted that financial Inclusion presented various opportunities to various players and beneficiaries including; Opportunities to Government; ffinancial institutions; and the Youth. He noted challenges faced by the Youth in accessing financial services and recommended some actions to improve the situation (See detailed Presentation).
Specifically, he recommended the following;
 Sri Mulyani Indrawati, Min. of Fin. Malaysia
The presentation explored pathways to youth financial inclusion, opportunities and challenges. It gave institutional issues as those leaning towards poor or lack of banking infrastructure, and individual as those concerning the individual persons such as the lack of income, distance to financial service provider or lack of necessary documents among others.
Lately, various banks have developed Financial Inclusion initiatives targeting the varying categories of the population. He gave a brief look at the one for Centenary Bank. It emphasizes;
Benefits of agent banking to customers (Youth encouraged to embrace) include;
Cost saving, Convenience, time saving, provides opportunity to borrow and promotes a saving culture. It is also another income stream and increase patronage of existing business. Over 1,500 agents have been approved to date. Interested individuals follow the instructions to register. Dial *211# and follow the prompts. Download an APP from Google play/app store.
TechnoServe works with enterprising people in the developing world to build competitive farms, businesses and industries through its nonprofit model company. It works through linking people to information, capital, and markets. The company’s approaches build market actor capacity, facilitate market linkages between actors, and strengthen the business environment.
Technoserve’s approaches present various opportunities to include;
Below are some of the innovative models the company has rolled out;
The presentation highlights more interventions in Uganda and other countries.
The presentation was based on the research conducted by the Department of Agribusiness and Natural Resource Economics, College of Agricultural and Environmental Sciences, Makerere University. It sought to answer 4 Key Questions. These included;
We need to ask about the products and services needed by youth
Value chain analysis for product needs of customers (e.g. savings, credit, insurance, etc)
Assessment of fintech infrastructure, Are there any barriers?
The key constraints holding back financial inclusion arise from both the demand and supply side barriers. Demand side barriers include, Digital literacy; Meaningful financial awareness; knowing your customer regulatory requirements and knowing your customer infrastructure. On the supply side, barriers include; ease of entry and regulatory requirement of players among others.
Challenges faced by youth in accessing credit
Proposed solutions by Financial Institutions to Improve Access and Utilization of Financial Services by Youth (Supply-Side)
Challenges faced by youth on the demand side included;-
Suggested solutions to address demand side challenges;
The presentation was based on the Go Big Hub concept. The concept finances businesses that involve contracts, bids or tenders, but without capital for execution. Individuals without collateral or banking history including youth do benefit from Go Big Hub financing mechanism.
Go Big Hub’s risk management model has a five-pronged risk management strategy of:
He finally advised that the solution to Africa’s poverty, unemployment, and low productivity, lies in;
The session involved table discussions that generated feedback around 2 issues; i.e. how can we practically enhance Youth financial Inclusion? And what are the creative ways that should be undertaken to leverage opportunities broadly. Following are recommendations from the round table discussions.
Practical ways to enhance Youth financial Inclusion
Creative ways to leverage opportunities
Below are some of the recommendations that have cut across all the presentations and discussions aiming to address both the demand and supply side limitations to youth financial inclusion.