Jeune Prépare Ton Avenir (Preparing Youth for the Future)

Jeune Prépare Ton Avenir (Preparing Youth for the Future)

Kinshasa, Congo (Kinshasa)Washington, United States
Organization type: 
nonprofit/ngo/citizen sector
Project Stage:
Start-Up
Budget: 
$1 million - $5 million
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

FINCA DR Congo will increase financial inclusion by tapping into the underserved youth market through financial education and youth-specific savings products.

About Project

Problem: What problem is this project trying to address?

Less than a quarter of adults in Sub-Saharan Africa hold an account at a formal financial institution, with only 14% using savings accounts. Often, a lack of trust or familiarity with banking causes people in developing countries to avoid formal financial services. Despite research that suggests youth informally save money and desire to open formal accounts, barriers such as distances to bank branches, restrictive policies and product features (fees and minimum balances), the lack of identity documents and the perception that servicing young clients is not a profitable opportunity for commercial banks prevent youth from full financial inclusion.

Solution: What is the proposed solution? Please be specific!

FINCA is developing new youth-focused savings products. To best suit the youth market, these new savings products will have no minimum balance and no fees. Transactions will be facilitated by authorized agents using point of sale (POS) devices, providing a convenient point of access for the program’s beneficiaries, as well as other FINCA clients. FINCA will pair all youth savings services with a financial education intervention. The financial education component will build youths’ knowledge about financial services as well as habits conducive to saving. In conjunction with the educational activities, FINCA will execute a marketing campaign that helps explain the program to youth and causes them to recognize that their activities are linked to a real financial institution.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

FINCA will identify a school with students whose parents fit FINCA’s target demographic. An account will be established by the school which will be used to collect school fees. Participants in the program also will be enrolled in age appropriate savings accounts and will receive financial education explaining sound savings practices. Students will save money throughout the year to be used for paying school fees, ensuring their continued enrollment is not jeopardized due to a lack of funds. Transactions will be conveniently conducted through a POS terminal at the school or a nearby agent. The use of POS agents will allow easier access to financial products for local residents, some for the first time. Students will be able to teach family members what they have learned through the program, spreading financial literacy further. Once students leave school, they will have saved a modest amount of money, affording them an easier transition to higher education or the working world. The education they receive will provide a sound basis for safe and effective financial practices for the rest of their lives. Overall, financial literacy will increase throughout the country, tearing down another barrier to financial inclusion and enhancing livelihoods.
Sustainability

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

While other financial institutions are beginning to explore the possibilities of youth savings initiatives in Africa, FINCA is the only organization providing this service in the DR Congo. Furthermore, FINCA DR Congo is placed at the forefront of this methodology as it is linking branchless banking with youth savings. Other major microfinance providers in DR Congo include Rawbank, ProCredit DR Congo, and Advans Bank Congo. As youth represent a vastly underserved market, competition mostly serves to enhance methodologies and urge innovation. There is presently as much room for cooperation as for competition.
Team

Founding Story

FINCA began as numbers and figures scribbled on a napkin by founder John Hatch during a flight over the Andes - a moment of inspiration that resulted in a ground-breaking plan to give Bolivian farmers the credit they sorely needed on flexible terms not offered by traditional banks. “Provide each rural family with a $50 loan…for any productive or emergency use…based totally on trust…no collateral…no business plan…one loan fund per village…fifty borrowers per fund…” John turned his idea into reality by establishing FINCA in 1985. Since then, without losing sight of its mission, FINCA has continually evolved its products while aggressively expanding its outreach to new markets. Youth savings is another step towards increasing access for the world’s poor to formal financial services.
About You
Organization:
FINCA International Inc.
About You
First Name

Bob

Last Name

Price

About Your Organization
Organization Name

FINCA International Inc.

Organization Country

, DC, Washington

Country where this project is creating social impact

, KN, Kinshasa

How long has your organization been operating?

More than 5 years

Has the organization received awards or honors? Please tell us about them

a. FINCA’s programs in Ecuador and Mexico were ranked in the Top 100 in 2011 by Microfinance Americas for outreach, transparency and efficiency.

b. FINCA’s programs in Azerbaijan, El Salvador, Guatemala, Jordan, Russia and Tajikistan were honored in 2011 with the Consultative Group to Assist the Poor’s Social Performance Reporting awards for their commitment to transparency and accountability in reporting about their impact on clients.

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Innovation
How long have you been in operation?

Operating for less than a year

Which of the following best describes the barrier(s) your innovation addresses? Choose up to two

Access, Cost.

Social Impact
Please describe the goal of your initiative; outline what you are trying to achieve

Through its youth savings program, Jeune Prépare Ton Avenir, FINCA DR Congo seeks to increase the number of youth in formal banking services by providing affordable savings products on flexible terms which are delivered through alternative branchless banking channels and paired with a financial education intervention. It is important for youth to receive proper training and experience at an early age in order to ensure the rising generation is financially literate and responsible. Early access to financial services will open a wider range of economic opportunities for impoverished Congolese youth.

Which barrier(s) to financial inclusion does your solution seek to address? (select all applicable)

Physical and other accessibility obstacles that prevent communities from reaching financial services, The lack of affordable financial products tailored to the needs of underserved and excluded communities,.

If you selected 'other' above, please specify which other barriers to financial inclusion you solution seeks to address:
For which underserved or excluded communities will your solution create access to valuable, affordable, secure and comprehensive financial services?

FINCA’s Jeune Prépare Ton Avenir savings program will target youth from low-income families in the DR Congo. Due to a lack of collateral, poor financial literacy, and prohibitive account terms, youth are largely excluded from the formal financial sector in this country. This project will provide education and savings products which will introduce youth to proper banking practices and allow them to accumulate assets. These youth will then go on to start families and create businesses, becoming active members of the banking sector.

Could your solution work in other geographies or regions? If so, where?

FINCA is conducting a similar pilot in Uganda. This pilot is achieving its initial outreach targets, suggesting the potential for scale-up in other countries in the region. FINCA has more than two decades of experience modifying financial products developed in one country for deployment in the other countries in which it operates. FINCA believes that the methodologies developed in this pilot can be revised to fit the needs of its 21 other subsidiaries across the globe and implemented throughout its network.

If your solution is dramatically successful, how will things be different in 10 years?

Thousands of those reached by FINCA’s Jeune Prépare Ton Avenir program will continue to reap the benefits of utilizing formal financial services, using the security gained by these practices to achieve a better quality of life. Other MFI’s will accommodate FINCA’s methodologies, spreading youth savings throughout the country, region, and world, significantly increasing financial inclusion.

What will have had to have changed to make this happen?

In order to achieve the previously mentioned level of success, an increased level of collaboration and cooperation is necessary. FINCA must generate partnerships with schools and NGOs which have the capacity to administer youth financial education. MFIs must communicate and collaborate in order to establish best practices in youth savings. Most of all, FINCA’s youth savings products must prove to be convenient, safe and effective in order to encourage the trust necessary to see full-scale financial inclusion.

What has been the impact of your solution to date?

As of the end of June 2012, more than 3,000 youth had access to financial services from FINCA DRC as part of its youth savings initiative. In addition, FINCA enrolled more than 1,700 youth in its financial education courses since April 2012. Session topics included savings, budgeting, finance and financial services along with lessons on reproductive health, relationships, HIV/AIDS, among others. These students are building their financial literacy and comfort with banking practices. They have saved a modest amount of money (on average $50) that they can apply toward school related expenses. Students taking part in the program also have established peer groups that encourage a culture of saving.

What is your projected impact over the next five years?

FINCA’s Jeune Prépare Ton Avenir initiative expects to reach 18,000 youth with financial education and youth appropriate savings products by the end of 2014. A generation of young Congolese will gain the skills and habits to become a base of bankable and financially empowered adults who can pass their skills, social capital and assets to the next generation. A successful pilot and roll-out will be considered for implementation in other subsidiaries in FINCA’s network, greatly expanding its youth outreach and financial inclusion.

What barriers might hinder the success of your project? How do you plan to overcome them?

Many of the barriers to financial inclusion are psychological. Previous financial setbacks due to poor decisions or cases of fraud which create mistrust cause mental burdens which result in many low-income individuals shying away from the formal financial sector. Children largely have yet to face these mental burdens, and early intervention can prevent them from making the same mistakes as their parents. Physical barriers such as long distances to service outlets will be remedied through the use of branchless banking methodologies. Other barriers include policy issues such as the legal age to enter contracts and the need for photo identification.

Winning entries present a strong plan for how they will achieve and track growth. Identify your six-month milestone for growing your impact

After six months, 8,000 youth will have opened savings accounts and 7,000 will have received financial education training.

Identify three major tasks you will have to complete to reach your six-month milestone
Task 1

Expand program to more youth by adding POS agents and partnering with non-school groups to reach out-of-school youth

Task 2

Review marketing strategy to identify ways to improve outreach, specifically to females

Task 3

Increase conversion of trainees to savers by adjusting financial literacy curriculum to be more conducive to opening accounts

Now think bigger! Identify your 12-month impact milestone

After 12 months, 9,400 youth will have opened savings accounts and 12,500 will have received financial education training.

Identify three major tasks you will have to complete to reach your 12-month milestone
Task 1

Review pilot and address any weaknesses in outreach or uptake

Task 2

Scale up pilot by implementing youth savings methodologies in new regions

Task 3

Incorporate mobile banking to make savings access more convenient and increase product uptake

Sustainability
Tell us about your partnerships

FINCA’s youth savings initiative in the DR Congo is supported in part by the MasterCard Foundation’s Youth Start program which is facilitated by United Nations Capital Development Fund (UNCDF). FINCA DR Congo is partnering with Humana People to People – Congo, a non-governmental organization with experience facilitating trainings in the DR Congo since 2006, to deliver the financial education portion of the project.

Are you currently targeting other specific populations, locations, or markets for your innovation? If so, where and why?

As mentioned previously, FINCA is conducting a similar pilot in Uganda which also targets youth from low-income families, specifically girls. This project has the same goals as the youth savings program in DR Congo.

What type of operating environment and internal organizational factors make your innovation successful?

FINCA International maintains a very decentralized operating structure. Thus its subsidiary in DR Congo acts with a large degree of autonomy, but receives support and direction from FINCA Africa's regional hub and FINCA's headquarters in Washington, D.C. This structure gives FINCA DR Congo the latitude to make the necessary decisions to ensure a successful pilot. The subsidiary best knows the situation on the ground and where to find the resources needed to implement the project. Being accountable for the success or failure of this project motivates the team in charge of its implementation to commit to achieving all goals and objectives.

Please elaborate on any needs or offers you have mentioned above and/or suggest categories of support that aren't specified within the list

Throughout its history FINCA has been keen to share its perspectives and expertise. It is committed to industry-wide collaboration, believing cooperation between MFIs is essential to eradicating poverty. FINCA relies on public and private partnerships to create new products and services that eventually become core business practices.