Youth and Children Inclusiveness In Micro-finance & Livelihood Approach

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Marcus Taylor
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1 Youth and Children Inclusiveness In Micro-finance & Livelihood Approach Presenter: Udaya Laxmi Pradhanang Education Team Leader Himalaya Country Office Nepal Program Save the Children US

2 Youth & Children Inclusiveness in Livelihood & Micro-finance Approach Introduction: Although youth and children are playing very important role in family and household economy, still their contributions are not recognized at institution level. The youth and adolescents are potential to learn for financial and livelihood activities if environment are supportive to them. They are considered dependent family member in term of economic activities. This paper discussed about how youth, children/adolescents participate in livelihood activities and link with micro-finance institutions. Save the Children US has initiated youth & children inclusive livelihood and micro-finance approach in partnership with financial-intermediary NGOs and savings and credit cooperatives particularly in Siraha district of Nepal. This approach has focused to readiness to access continuum process for youth and adolescents livelihood development In this approach, learning sessions, training, mentoring, counseling and coaching are key elements to establish linkage with micro-finance services for youth and adolescents. The financial institutions are found very confident if youth and children are already prepared for the livelihood activities. The objective of the paper is to share the experience of youth and adolescent inclusive livelihood support strategy and how this strategy has increased to access in financial-intermediary NGO's saving and loan services for the youth and adolescents. Access of micro-finance services in Nepal : Like in other country in South Asia, many studies and research has found that the Micro-finance program has made a remarkable contribution to poverty alleviation in Nepal. No doubt those micro-finance institutions are providing financial services to rural poor households living in below subsistence economy. The micro-finance rural development banking program, financial intermediary NGOs and savings and credit cooperatives extends their collator free credit services generally targets to married and household heads either in the form of group guaranty and with collator to individuals. The quarterly newsletter of Rural Micro-finance Development Center data showed that around 2,048,742 rural people have already access to microfinance services in Nepal, which is 8.09% of the total population and 26.1% of those are living below the poverty line, of which 1,233,058 are women, representing 9.37% of all Nepalese women. This information has clearly shows that unmarried youth and male youth cannot access to financial services provided by the micro-finance institutions. So this is obvious that micro-finance institutions does not target to youth population for their service. Key issue : a. Lack of access to financial services Many micro-finance institutions are still unable to provide their services to the youth especially male and unmarried adolescents who are living below poverty line. The micro-finance services are predominantly the mothers and female members of unemployed youth and adolescent not the direct service and access to youth and adolescent themselves. Such micro-finance policy practice will never be truly successful in lifting youth and their families out of poverty.

3 b. Social practice: The social and culture practices allows that mostly head of households and senior old family members are the authority of financial transitions either business or any other economic activities. Youth specially male and unmarried female youths are unable to go for financial services even though many financial institutions and their services available. Even though the financial service providers generally claim that their services are extended to the subsistence households in Nepal. c. Lack of disaggregate data base system in financial institution : The disaggregated data base system for youth clients between the ages of 15 to 25 years old are not available in existing system. d. Lack of policy provision for child saving in micro-finance institutions: Childhood is the foundation of learning and gaining experience for future life. Engagement with financial institution since childhood provides learning opportunity, build confident in making economic decisions for future life. In term of children's perspective, microfinance institutions have no mandatory provision in the current policy and strategy. There are few NGOs and INGOs who had initiated the child saving scheme. Rational of youth inclusiveness livelihood approach: a. Size of youth population: In Nepal, approximately, 21% of the total population is youth aged between 15 to 24 years (CBS Report 2005). 44% of total population is children of below age of 18 years. Approximately, 31% of total population in Nepal is living below the poverty line. 24% of total population is living less than $1 per day and youth with high unemployment. b. Unemployment: Around 47% of the economically active total population is out of work, and half of this unemployed population is youth. Youth are dependent to household heads. They are unable to engage in self employment though they have enthusasium and courage. Many conflict related studies have found that exclusion of youth engagement in economic activities is one of serious reason behind emerging the 12 years long armed conflict in Nepal. In this current post conflict situation, youth unemployment is serious concern of government as well as NGOs, financial institutions, micro-finance companies. c. Poverty: The socio-economic life of youth is challenging even before armed conflict began in Nepal. Critical mass youths living with subsistence farming and below poverty are not mainstreaming in the households economic development. The youth who have no access to financial services are living in below poverty line and they have no collator to do any kind of economic activity for their own benefit and self employment.

4 d. Potential human resources for capital formation: Youth are very potential human resources are mobilized for social sector not for economic development. Youths have lack of knowledge for entrepreneurship and technical skills for self employment. Youths though they are economically active, unable to start economic activity independently due no access to fund, lack of knowledge of entrepreneurship and technical skills and cannot start for self employment. e. Lack of entrepreneurship skills: The micro-finance institutions provide financial service in term of providing credit, loan and saving services but they have no plans and policies for the microentrepreneurship development, micro-enterprise service and linkage with the service centers and also not focused to youth assuming that youth are mobile and not collator. The micro-finance institutions have not recognized the potentiality, capacity and supporting to households in economic activities. Youth and Adolescent inclusive livelihood program approach of Save the Children US: Many microfinance institutions, youth-serving organizations, policy makers, and international donors are exploring the use of microfinance as a livelihood development strategy for youth. Research and practice show the need to explore youth inclusive microfinance from the "readiness" and "access" perspective. Microentrepreneurship, micro-enterprise and micro-finance services are interlinked and complement each other and contribute in improving the economic status. To promote the youth inclusive livelihood approach, Save the Children has developed partnership Experience of Save the Children US in implementation of approach in partnership with Micro-finance intermediate NGO in Siraha district : In the year 2006, Save the Children has initiated youth and adolescent livelihood with micro-finance linkage approach in Siraha district in partnership with the Shreejana Community Development Service Center an NGO working for micro-finance intermediately services. The objective of this project is to build confident and capacity of youth and adolescents for readiness to access micro-credit services and to bring about positive changes in the lives of socially and economically marginalized adolescents; particularly dalits and girls at-risk through sustainable livelihood support. Overall Objectives: Create and expand savings and credit groups among women and adolescents in targeted districts Specific Objectives of the project:

5 To establish community based and micro enterprises based learning center thru Participatory Learning Action (PLA) approach To provide business counseling who decided and are engaged into microenterprise and self employment activity. To develop vocational skills, micro-enterprise development skills of youth and adolescents on viable sub-sectors. To establish linkage with the Micro-credit for saving and loan for microenterprise initiation Major activities : a. Micro-enterprise based Literacy course: The course is designed for 9 months based on the potential market. The participants are linked to micro-finance institutions and started group and personal saving, gain technical skill and will have access to get credit/loan from MFIs b. Sub-sector analysis and facilitation support: Sub-sector study and analysis conducted and based on the sub sector, necessary facilitation support provided. c. Vocational skill training based on market and interest of youth d. Business start up training and Business awareness Campaign e. Linkage with micro-finance institution and cooperatives: When youth and adolescents are ready for financial services, they will be linked to microfinance. Achievement of this approach in two year period in 2006 and 2007 : 291 Participatory Learning and Action Centers graduates were linked with micro-finance institution for credit program. (181 were linked with Shreejana Community Development Center and 110 linkages with saving and credit cooperatives). 285 unmarried and male youth are still unable to take micro credit services in any micro finance institutions. Challenge: Youth male & female are still not mainstreamed in micro-finance because of no provision of youth and children member in micro-finance? It is still ad hock and policy needs to be develop. The micro-finance policy and strategy are not youth friendly and youth inclusiveness. No child saving policy with the micro-finance Youth mobility Recommendations: Youth livelihood program can be success if they are prepared to ready first and support major three steeps in the micro-finance policy and strategy : i. Livelihood Planning This first step involves effective livelihood guidance efforts led by families, schools and other community institutions serving youth to support

6 community-based career counseling and livelihood planning resources for young men and women. ii. Livelihood Readiness The second step focuses livelihood based participatory literacy learning and action learning sessions. This learning sessions will ready and build the capacity and confident and able to develop business plan market linkage for livelihood activities as well as linkage with the microfinance. This programming involve linking out-of-school youth with non-formal basic education and employability skills iii. Livelihood Access The final step in youth livelihood development involves efforts to promote the accessibility of employment and self-employment services to youth supporting the development of commercially-viable, youth-friendly financial products and services and linkage with micro-finance institutions. Conclusion: This approach has build confident and capacity of youth and adolescents for livelihood readiness. They had started IGP activities, micro-enterprise. They learned the entrepreneurship skills, vocational skills training, saving collection and business plan development. Finally youth are able to get in touch with the financial intermediately NGO and also with the cooperatives for their livelihood activities.

Ghana : Financial services for women entrepreneurs in the informal sector

Ghana : Financial services for women entrepreneurs in the informal sector Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized No. 136 June 1999 Findings occasionally reports on development initiatives not assisted