There are 2.2 billion children in the world – and less than 1% has access to any form of financial education. Only 37.9% of youth aged 15 – 25 have accounts at a formal financial institution. Children take part in the economy – yet they are often excluded from safe, secure and responsible financial products. They find it hard to save– and run the risk of being exposed to exploitative situations in the event of a crisis.
At the same time, children get access to technology at an earlier age. The use of digital devices is widespread not only in the UK where 90% of children over 13 own a mobile phone and Sweden where 90% of 6-7 year olds are internet users, but also in markets such as Asia, Africa and Latin America. Technology is continuing to creep down the ages, reinforced by the use of tablets and smartphones.
Technology provides children unprecedented global reach and ability to influence not only the perception and adoption of brands but also to harness the power to redefine industries and their products and services that are not meeting their needs. When it comes to financial services, business innovation and technology combined can provide access, transparency, and simplicity towards greater financial inclusion among youth.
At MasterCard, we believe that enabling financial education and inclusion is critical for promoting the economic and social livelihood of children – and are working on a number of fronts:
• As a business, we have adopted the UNICEF framework of Children's Rights and Business Principles and are concentrating on a few key principles most relevant to our industry. The framework is simple to use and helps us assess and integrate how our activities in the workplace, marketplace and the community impact children's lives and hence how important they are as stakeholders to our business.
• As a key player in the financial services industry, we believe there is immense value in public-private partnerships that enable formal financial services and financial education and positively impact the rights of children. The SASSA Debit MasterCard program in South Africa exemplifies how electronic payments can dramatically improve the lives of huge underserved youth populations (over 20 million recipients in South Africa, of which 6 million are child social welfare recipients) – while at the same time, creating efficiencies and transparency for the government.
• As an industry leader, we are working with CYFI (Child Youth Finance International) to draft guidelines for our financial partners on developing child friendly products. The guide will follow frameworks and principles already laid down in the UNICEF and CYFI "Beyond the Promotional Piggybank" discussion guide co-authored with MasterCard volunteers. Youth and child representatives from across the globe have joined in various consultations with CYFI on these principles and their ideas have been included.
• Recently, we announced the launch of the MasterCard Center for Inclusive Growth. The Center will conduct and support academic research and provide strategic philanthropic investments for further sustainable and equitable economic growth and financial inclusion around the world. Investments will include a particular focus on empowering women and youth who comprise a large share of those currently excluded from formal financial services. One of these efforts will be in Nigeria with The ASSETS program which will complement Mercy Corps' programming by furthering girls' access to and ability to manage economic assets.
Investing in sound financial education and products for youth is good business. Financial institutions can provide safe, secure and responsible financial products and services which can support young people to accumulate capital, send or receive money safely, and take loans to pursue goals such as higher learning, entrepreneurial ventures and increasing assets – and thus improve livelihoods and youth's overall development.
Anna Zanghi is global lead, youth segment product, at MasterCard.
Copy on this page is provided by UNICEF, supporter of the children: the next business agenda hub.
