Has Youth-Inclusive Finance Finally Grown Up? Key Lessons from 15 years Working in Youth Inclusive Finance
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Author: Tim Nourse, Making Cents International.
On March 16th, e-MFP was pleased to open applications for the Luxembourg Award for Inclusive Finance (LAIF) 2026 (formerly the European Microfinance Award), on the topic of ‘Unlocking Youth-Inclusive Finance’. This 17th edition of the Award, launched in 2005 by the Luxembourg Ministry of Foreign and European Affairs, Defence, Development Cooperation and Foreign Trade, is jointly organised by the Ministry, e-MFP, and the Inclusive Finance Network Luxembourg (InFiNe.lu), in cooperation with the European Investment Bank. The first prize is EUR100,000, with EUR10,000 – and lots of positive exposure – to the runners-up.
Kicking off e-MFP’s annual series of guest blogs on this topic, Tim Nourse, President & CEO of Making Cents International, which is supporting the e-MFP Award team, describes what the inclusive finance community has learned from over fifteen years of initiatives, what gaps remain, and what the evaluation teams are hoping to learn from the Award entries.
When I joined Making Cents International almost fifteen years ago, the coming “youth bulge” was all over the airwaves. Could developing countries achieve the “demographic dividend” of accelerated economic growth by leveraging the potential of their large youth populations? Or would this opportunity be wasted in a demographic “bomb” of instability and further poverty? Access to finance was seen as critical to facilitating the dividend, and with funding from the Mastercard Foundation, CGAP, and USAID, Making Cents and others began initiatives and research to unlock finance for youth. Since then, the inclusive finance community has learned the fundamentals of youth finance and achieved key successes. Nonetheless, gaps remain that continue to inhibit youth access to important financial products and services.
The First Steps of Youth-Inclusive Finance
Our initial work focused on the basics: what is youth demand for finance, who is meeting these demands, and how are institutions serving young people? From there, activities deepened to explore youth-inclusive finance within larger ‘ecosystem’ approaches, the role of non-financial services in encouraging uptake, and how to leverage technology for greater outreach. Through these collective efforts, we learned five key lessons[1]:
Youth demand for financial services changes over time. Youth is a transitory stage – from child to adult, learner to doer, dependent to contributor – and youth demand for financial services naturally changes accordingly. When they are in school, opportunities to save and experiment with borrowing are necessary; as they begin a business or first job, loans and payment solutions become more important; and as they mature and start a household, longer-term debt and investment products become paramount. To reflect this transition, youth finance must meet youth where they are and evolve with them.
There is a business case, but it depends on for whom. Quantitative research has confirmed that financial institutions can serve youth profitably, but the business case is strongest for “near adults” - youth aged 25-35 who are already established and mimic the characteristics of other adults.[2] For younger youth populations, the case is weaker, but it still exists if institutions exploit cross-selling, leverage brand loyalty, and factor in the lifetime value of customers. Understanding each institution’s specific situation and business case is thus a necessary first step to determine which segment they can serve, and how.
Successful products are designed for specific youth. While we talk about “youth” as a homogeneous group, their demand profiles differ depending on whether they are urban, rural, male, female, on the move, or have started a family. Designing tailored products for these specific sub-segments of youth is critical to successful delivery and uptake by young people.
Youth develop in a system; products should be considered in them as well. Positive Youth Development frameworks have shown that youth develop best when engaged directly and in a supportive environment of parents/families, mentors, and community members. Market system approaches recognise that successful service delivery is dependent on identifying and addressing challenges at the enabling environment, supply, and demand levels. Successful youth finance initiatives take both frameworks into account as part of their design and delivery process to ensure they meet the needs of youth and the market in a holistic manner.
Non-financial services are critical. Throughout this period, youth are developing financial knowledge, attitudes, and behaviours. Responsible institutions recognise that providing (or partnering to deliver) non-financial services to build knowledge, support healthy attitudes, and encourage positive financial behaviours is important from both a consumer protection and product success perspective.
Milestones Achieved
These lessons have moved the needle on youth finance. According to the World Bank’s Findex, since 2011, account ownership among youth worldwide has increased significantly, from 37% to 69%. While this remains lower than that of adults, the gap in access between them has decreased from 19% to 12%. In lower middle-income countries (LMIC), the gap is even lower - only 8%. This difference in ownership is largely driven by formal financial institutions, as mobile money accounts are generally used by the same proportion of youth and adults. Formal savings rates have also gone up significantly, more than doubling from 8.5% to 19% among youth in LMICs. The gap between youth and adults saving formally has also shrunk, from 4.5% to 1.5%. On the flip side, the area with the least progress for youth is formal lending, in which rates have increased by only 1% since 2011 and remain half that of adults.
The Next Generation of Learning Topics
These improvements are significant, but work remains to decrease these gaps further and truly support youth as they transition to adulthood. What must we do to continue progress?
Effectively leverage technology. The rise of mobile money and digital finance has been a major driver of increased access to finance for youth. Further leveraging technology to promote nano-lending, use data analytics for improved underwriting, and link youth to on-line education and training all promise to accelerate trends in youth financial inclusion.
Go beyond “near adults” for lending. The gap in financial inclusion for youth remains largest in the area of lending, and youth consistently point to a lack of credit as a key impediment to their livelihoods. Cracking this nut will require further innovations around technology, partnerships, and financial capability building.
Serve adolescent girls and young women effectively. Recent CGAP research has uncovered that gaps in financial access between girls and boys begin at age 17 and deepen through age 25 due to higher risk perceptions among girls, lower access to identification documents, and restrictive social norms.[3] Supporting adolescent girls with additional non-financial services to build financial capability or with tailored products to meet risk perceptions are avenues to explore more deeply.
Provide services that “grow” with youth. While there are many examples of a single youth segment being served successfully, it’s rare that an institution or larger initiative “grows” services with youth, helping them to move from savings to borrowing or from consumer to enterprise credit. Taking a lifecycle approach to youth may provide insights that can unlock additional services for youth that will support their transition to productive livelihoods.
Unlocking the Dividend Through Youth-Inclusive Finance
Time is running short for countries to unlock their demographic dividend. The 2026 Luxembourg Award for Inclusive Finance offers our community an important opportunity to take stock of whether youth-inclusive finance has finally “come of age” and is able to effectively support young people as they transition to productive adults. I look forward to participating in the process, seeing what is being done today, and sharing progress that can finally bring this market to maturity.
All relevant supporting materials, application guidelines, eligibility criteria and links to the application forms are available at www.inclusivefinanceaward.lu. Applications close on April 12th at 23h59 CEST.
About the Author:
Tim Nourse is President & CEO of Making Cents International, and is supporting e-MFP in the design, delivery and evaluation of the Luxembourg Award for Inclusive Finance 2026.
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[1]More detail on these lessons can be found in: Y Initiative: Finance for Youth; a compendium of global good practices, FMO 2022
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