From One Generation to the Next: The Role of Parents in the Financial Inclusion of Young People

This paper explores how parents play a key role in financial behaviors of youth, specifically in their ability to access financial services and develop financial capability. It draws primarily on the experience of Freedom from hunger in Ecuador and Mali implementing the Advancing Integrated Microfinance for Youth initiative. The paper provides information on the importance of understanding the relationship of youth and parents living in poverty, and the way family can influence a young person’s behaviors. It also offers recommendations for involving parents in youth financial access and capability. Key recommendations include:

• Match age at which a young person can open a savings account at a formal financial institution with the legal age to engage in income-generating activities so that young people can start building assets as they earn income;
• Establish internal policies that effectively enable young people to manage their own accounts;
• Incorporate staff training on how to work effectively with youth clients;
• Promote savings for all household members, at all opportunities;
• Implement financial education programming for both parents and youth;
• Implement a risk-monitoring and mitigation system for youth financial services;
• Conduct longitudinal in-depth studies on intra-household financial dynamics.