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Financial inclusion in Africa

Financial inclusion in Africa



​​​​​WSBI program partner, expert Passkesen discusses research, previous efforts

>> Learn more about MTripleSW

>> Read the December 2017 News & Views


​The following story appeared in the December 2017 of WSBI-ESBG News & Views.


​Open source data from sources like the World Bank’s Findex show that young adults still living at home comprise a big part of the underserved and unbanked population worldwide. Tackling this challenge is no small task. But work continues through the Making Small Scale Savings Work program, or MTripleSW​, a partnership in place since September 2016 between WSBI and the Mastercard Foundation to help boost financial access and economic development in seven African countries.

​The MTripleSW program assumes that this “Young 3rd adults” segment, which lives at home with parents or in a guardian’s household, remain a largely neglected and thus unserved and underserved segment in the countries where the program places focus. Despite this, young adults contribute to household income and potentially have the extra income to be able to convert into formal savings.

MTripleSW program partner and expert Lise Paaskesen delves into how best to address this challenge by drawing on past experiences with WSBI project work in Africa.


Tell us about the research project with WSBI member bank Post Bank Uganda (PBU) and its main purpose and findings. 

The research with PBU focused on expanding on the PBU Youth and Students Savings accounts, exploring youth financial needs, specifically savings needs and to co-create a technical platform. The main purpose of the research, therefore, was to develop a savings product that was relevant to Ugandan youth aged 12-30, which could be accessed digitally, thus providing all youth in Uganda access to a formal savings mechanism.

The applied methodology allowed us to not only understand youth views and opinions about savings, but also to gain an understanding of their savings behaviours. Following a short diary study, we found that youth actively and consciously set money aside for later use. An interesting find was that youth financial capacity and behaviour corresponded to PBUs lower-end customer base. Hence, not only do youth know how to save and actively do so, but also youth are viable customers for PBU.


Why have you suggested a co-creative approach when undergoing product research with PBU and what would you have missed if the approach would have been different?

The chosen methodology included a co-creation component. ​

Not only was one PBU staff member present during the bulk of the research, but key – and multiple – PBU staff members were involved in the development of the digital banking platform, or banking app. The reason for such an approach was that research provides conclusions presented to PBU in a presentation and in written form. Seeing and experiencing something with your own eyes and meeting the people you are servicing, creates a whole other dynamic, feeling and inspiration, and should thus create a deeper sense of commitment.

In addition, co-creation becomes important for strengthening intergenerational understanding: youth are no longer seen as a group of individuals that seem distant, perhaps strange, and often misunderstood. Rather, youth are given a face, voice and a relationship is formed between PBU and youth. Hence, I found it important that PBU experience youth, their energy and that PBU hear the way of talking by youth and the way they express themselves. As a result, the developed product should be prove more relevant to youth.

If we had not done co-creation, I believe learning at PBU would have been less profound – more superficial. 


What were the most surprising answers you’ve received when talking to the three different groups – customers, bankers, parents?

The response I get most often from bank staff members is that they had no idea youth appreciated the opportunity to be actively involved in the research and design process nor that they could and did save. In Kenya, specifically, it came as a shock to the bank that youth craved autonomy. I have also had people say to me that they did not know youth could express themselves in such an analytical way.

Secondly, I found it interesting to hear how knowledgeable youth are about what their parents think about them saving. 

​During an exercise with youth in Uganda where half the group role-played their parents, they said their parents would dislike the idea of youth access to a formal savings account. In a focus group discussion with parents afterwards, it became clear the youth role-playing their parents had been spot on. Parents tend to think highly of their own children: their own children are likely to be able to handle the responsibility of having a savings account and, yes, of course they save. Other children, or youth, however, should not be trusted with such a responsibility, partly because they may misuse the account or the money in it. ​

A specific example of the above and related to WSBI member bank in Kenya – KPOSB – was when I was working with staff from different departments and we were discussing autonomous use of the youth savings account for youth under the age of 18. During a break, one staff member told me that she had given the bankcard and PIN code to her son, who was a minor, and that he was free to use it as he saw fit. She did not know how much money he had in the account nor what he did with the money: It was his account and his business. However, during discussions in group and related to protecting the bank, she sympathized with the need for parental control.

Now, thinking about it, there seems to be an innate need to protect the bank. It makes sense, of course, and it is their job to keep their customer’s money safe, but this need to protect and contain, as based on research, may prove counterproductive.The dominant discourse seems to be: if we allow youth too much freedom, they may be tempted to do illegal activities and we will no longer be able to control them and then we – the bank – will be at risk. The dominant discourse is rooted in fear, rather than the positive consequences of empowerment and opportunity.


What do you think is the biggest misunderstanding between bank staff and customers and what can be done/has PBU done to overcome these?

I think the biggest mistake is thinking that banking is about numbers and economics, only. Of course, a large part about banking is numbers and quantitative measuring, but it is also qualitative. It is inherently important to understand the things numbers cannot tell, such as why people behave certain ways or how what is seen in numbers has come to be. This is why customer-centricity and their participation are necessary, especially if the bank seeks to expand their portfolio of business to include marginalized groups of society because they are marginalized.The best case scenario would be bank staff would be mixed to include people with different expertise so that the entire spectrum from social to numbers and data is covered.

​As for misunderstandings by customers: I think there is an inherent belief that banks are expensive service providers and that the service they provide is not for everybody. It is almost as if youth see having a bank account as a status symbol linked to a status they have not yet obtained. Youth have no problems iterating why keeping their money in a bank would be beneficial, yet,​ they say, the bank seems distant and unwelcoming. An example is that youth in Kenya were proud to show off their bankcard. ​

The previous research focused on 18-25 year olds only. MTripleSW will now extend the so-called “young 3rd adults” focus to those still living at home and between the ages of 18-30 years old. Why do you think this segment is equally important and would we need a different approach in understanding their needs? 

Interesting question. I agree with the statement that they are equally important as youth. Like youth, young adults are often forgotten and neglected in policies that aim to affect them, which I think is related to the fact that we do not really understand them, their situation or their reasons for perhaps wanting to stay with their parents. These decisions and the realities in which they find themselves may go against cultural norms or the ‘normal’ process of growing up. 

In addition, living in the household shields them from the outside world and us – they remain, in both figuratively and literal sense, hidden. Also, it is not because young adults stay in their parents’ household that they do not aspire to things. ​

These things they aspire to are subjective, but do not take away from the fact that they should be given supp​ort to reach their aspirations. Secondly, living in their parents’ household may put pressure on them to, for example, support the household income. We saw this during an exercise with Ugandan youth where two young males noted they were expected to support their mothers financially because their father had passed when they were young. In a sense, these boys were required to fill the fathers’ role as income generator.

On whether we need a different approach in understanding their needs: I do not think it is necessarily about needing a different approach as it is about  





 


​​asking different kinds or types of questions. Our approach should remain customer-centric and should allow for their participation, based on critical reflection and inquiries. However, the questions we ask may diverge from those we have asked before. Much of our considerations will be based on relations within the household and with other household members as well as processes of coming of age, which are considered ‘normal’ in the given context. These considerations and analyses based on them should provide insights into young adults’ socio-political positions within these microenvironments that are hou​seholds linked to socio-economic possibilities of young adults. ​​

>> Learn more about MTripleSW

>> Read the December 2017 News & Views




Financial inclusion; Financial education