YouthSave Learning Exchange Event

1. YouthSave Learning Exchange Event YouthSave Helping Youth Build a Tangible Stake in Their Future Monday, February 14

2. EAB Panel Discussion 1: Product Delivery/TechnologyPresentersAnne Françoise-LefèvreBeatriz MarulandaMike SotoModeratorJamie Zimmerman

3. Innovative product delivery and technology Anne-Françoise Lefèvre, WSBI

4. Reaching the youth market – Good practices by WSBI members Facilitating account opening: low minimum account opening , matched by the bank (Philippines) Incentives to save: definition of a savings objective, amount and frequency of deposits (Mexico) « bonuses » for limited withdrawals (Chile, Malaysia) Evolving product, as the child grows (Sri Lanka) School Bank approach (Thailand)

5. Opportunities from new technologies and « banking beyond branches » models Enabler for deeper financial inclusion lower costs for the banks and for the clients enhanced convenience and usability of products broader geographical accessibility of services But still uncertainties: costs and resources of managing a partnership with a non bank operator use of alternative channels beyond payments? need to offer more than transaction facilities to meet « bancarisation » objectives

6. Implications for youthsavings What do we know about the mobile phone equipment of young people and their use in the 4 YouthSave countries, and in developing countries in general? Are thereanyothertechnology-relatedtoolswhichcouldbeused, beyond mobile phones?

7. Corresponsales No Bancarios-CNBs The Branchless Banking Model of Colombia Innovative Product Delivery and Technology Beatriz Marulanda

8. CNBs are third parties that, on behalf of a financial institution, provide a “cash point” for financial services to the community.

9. What do we know from the “client side” • There is demand for a savings product from lower income segments: • Main source : Shifting informal savings to formal instruments • Which Factors have shown to be critical? • Simplicity (Product Design and Technology) • Proximity ( Low Transaction costs ) • Reliability (Acess when needed) • A Flexible but Structured Product • What do we know from the “supply side”? • Low Balance Savings accounts make a difficult business case – specially in branches. • “Branchless Banking” – A win-win solution? CNBs are critical

10. Outreach in Colombia - Progress • June 2006:Only 72% municipalities with banks. 65% by Banco Agrario ( state owned bank). • By end 2010:99% outreach. Greatest part with CNBs.

11. CNBs – What have we learned in Colombia? • Supply Side • Low cost network • Not in all regions • Banks do not manage cash • But it is not easy for the CNBs • Demand Side • Trust your neighbour • Low Transaction Costs • Wish more products were offered

12. Challenges • How to “role” out the network • How to “balance cash” at the CNB. • Will clients pay for transactions? • What is the value proposition to clients? • Cash In - Cash Out, only? • Critical Regulation • Authorization + Minimum requirements to ensure savings • Authorization of Account Opening + simplification of KYC for small balance accounts

13. Saving is a Fine Thing… YouthSave Helping Youth Build a Tangible Stake in Their Future Miguel A. Soto-Class Center for the New Economy San Juan, Puerto Rico

14. A Decade of Initiatives ARCO(Savings and Individual Development Accounts Act) program in 2001 SEED site 2005-2008, Vega Baja, Puerto Rico Children Savings Accounts, Caguas, Puerto Rico

15. Policy Nonpartisan/nonpolitical Means tested programs Local players are vital Public advocacy vs. back channel Value of grassroots support Administrative Bank negotiations ‘Hand-holding’ intensity Program stability Local knowledge Barriers to entry Follow-up Macro Challenges & Constraints Loss of wealth Failure of financial institutions Economic crisis Social conflict Micro-lending crisis If I’d Known Then…