Why Tanzanian youth opt to buy cars instead of saving money

Sunday February 10 2019

 

Did you know that savings accounts and a culture of saving have a positive influence on mental, reproductive and sexual health of the youth?

I guess not. According to Children and Youth Finance International, studies conducted in Ghana, India, Uganda and Kenya suggest that there is a positive relationship between youth savings and a higher level of self-esteem and participation in social groups. The Amsterdam-based group shows that studies conducted in Kenya and Uganda seems to suggest that there is a positive association between youth savings and sexual health knowledge and positive behaviour.

These are interesting findings for Tanzanians as the youth demographic is huge and its potential even bigger especially if a culture of saving was to be inculcated in them while young.

The same studies opine that participants in savings programmes demonstrate development of more empowered gender attitudes, lower approval rates of risky sexual behaviours and improved HIV prevention scores.

According to this newly released report, there are five reasons to invest in Child and Youth Friendly products. These include:

The same investment used to acquire one young professional can also be used to acquire five students.

Children and youth are digital natives. They use low cost self-serve channels. Children and youth are easy to reach through schools

Each of them has parents and guardians who will consider your institution for their own needs.

Over time, these young people will become loyal young professionals and already have a long lasting relationship with your institution.

Opportunity continues to exist for Tanzania considering young graduates who enter the job market. For lack of financial awareness skills, tend to buy cars as soon as they get their first loans.

That in itself becomes a cost centre and they spend the rest their formative years at work indebted. It is important then to create products that suit the needs of children and youths in terms of value proposition, competitive assessment and co-creation sessions with the children and youth. It is also important that the design considers competitive analysis, business requirements and a road-map.

If the product then has been piloted for youth usability with a detailed go to market plan the product would be ready to launch and as it gathers customer feedback.

Given the increasing youth population in developing countries, the high levels of youth unemployment and limited economic opportunities for youth and governments are increasingly looking for proactive approaches to help youth realize their full economic potential.

In this context, access to financial assets and resources is gaining attention as a key contributing factor to help youth make their own economic decisions.

Yet youth face many barriers in accessing financial services, including restrictions in the legal and regulatory environment, inappropriate and inaccessible products and services and low financial capability. The public policy opportunity—and imperative—is evident.

To overcome the barriers faced by youth to access decent employment and achieve successful youth financial inclusion, the international community has to adopt a multi-stakeholder approach that engages governments (including policymakers, regulators and line ministries), financial service providers, youth service organisations, other youth stakeholders, as well as youth themselves.

#BankTheYouth Campaign’s messages

The #BankTheYouth Campaign wants to bring together all the stakeholders and promotes best practices in youth financial inclusion, including but not limited to:

1. Coordinate efforts among different regulatory bodies, financial service providers and other youth stakeholders by developing closely aligned policies and activities that support financial inclusion for youth

2. Developing legislation and services consistent with the principles supported by the smart campaign and the child-friendly banking principles of child and youth finance international.