Increasing Access to Finance for Youth in Ghana: Lessons Learned from the YIEDIE Project

Disadvantaged, urban youth face a range of challenges in accessing financial services: long distances to reach financial service providers financial products that are inappropriate for seasonal or intermittent work, minimum age requirements to open a bank account or obtain credit, and limited experience with financial services. In addition, financial institutions have traditionally been reluctant to serve young people because they are considered unbankable (unable to save, a high credit risk due to their engagement in less-profitable enterprises, and lacking business experience and conventional collateral).

Recognizing these challenges, the Mastercard Foundation-funded Youth Inclusive Entrepreneurial Development Initiative for Employment (YIEDIE) project commissioned a market assessment of youth financial services as part of its start-up activities in 2015. The assessment found that young people usually spend their income on savings, food, tools, house rent, transportation, phone service and other bills. They typically save in order to prepare for emergencies or business expansion and to meet their personal needs. The assessment further found that although most young people had experience with saving, only one in five (19%) had tried accessing credit from a financial service provider, a relative or a friend. Issues such as difficulty in providing proof of residence and fear of being unable to repay the loans were some of the reasons offered for the low numbers. The study noted that there was demand for financial products. Most of the youth interviewed expressed a willingness to pay an account opening fee of between GHc 1 and GHc 50 (between US$0.25 and $10.00) and to maintain a minimum balance of between GHc 5 and GHc 50 (between $1.00 and $10.00).

Read the entire brief entitled "Increasing Access to Finance for Youth in Ghana: Lessons Learned from the YIEDIE Project" here.

Exchange rate used is US$1=GHc 5.5