Microfinance, Youth and Conflict: Emerging Lessons and Issues

This note outlines current practices, learnings and relevant issues for further examination to serve youth in conflict situations with microfinance. The note discusses:

• Microfinance for youth, in general;
• Microfinance for youth in conflict-affected situations.

It explains:

• Reasons for focussing on the youth;
• The manner in which the youth represent a potential untapped market for microfinance;
• The reasons for there being only a few microfinance programs that serve the youth.

The note lists its findings with regards to the provision of microfinance to youth, which include:

• Youth age cohorts matter; it is affected by political and legal factors;
• Not all microfinance institutions can or should serve youth;
• There is a need for careful packaging of training and financial services;
• Deposit services are crucial for youth to accumulate assets for the future. They require flexible products.

The paper argues that microfinance alone is not enough to mitigate conflict.It lists the following lessons from field studies:

• Microfinance is possible for youth in conflict situations, but is extremely challenging;
• Microfinance is feasible in areas that have emerged from conflict, rather than those that are under intense conflict;
• There is a need for holistic preparation, training and counselling;
• Deposit services are especially important.

The paper concludes by recommending further research, and that donors and governments be cautious and support an enabling environment.