Worldwide 12.6% of youth are unemployed. This is not only detrimental to economies on a national scale, but impacts directly on the youth themselves. Unemployment is shown on a personal level to affect people’s sense of dignity and lower their self-confidence by limiting their contribution to and full participation in their community and/or contribute to their family income.
The microfinance industry is a key player in addressing this issue and is responding to this urgent crisis by developing innovative ways to extend and adapt existing microfinance services including savings, loans and cash transfers and non-financial services including financial literacy, health education, business training to the youth in an appealing, sustainable and cost-effective manner.
Other microfinance providers are attempting to directly address the crisis of youth unemployment directly through youth themselves. This is achieved by boosting new youth-led business creation and promoting and facilitating self-employment. Institutions such as Uganda Finance Trust and the Bank of Katmandu, part of the YouthStart and YouthSave Consortium respectively, have each introduced youth savings products that have enjoyed encouraging results and provided evidence on the elusive business case for youth financial services.
“If you go out into the real world, you cannot miss seeing that the poor are poor not because they are untrained or illiterate but because they cannot retain the returns of their labour. They have no control over capital, and it is the ability to control capital that gives people the power to rise out of poverty.”
Deki finds itself in the position to be strongly involved to this innovation and to join in this movement. In 2018, only 7% of our loans went to those age 18 to 25, showing we have some real room for improvement and increased focus in this area. We acknowledge and embrace the challenges we may face in reaching and encouraging more young applicants and making our services suit their needs, as it will mean a brighter future for many young people and a way to escape the inter-generational cycle of poverty.