The MasterCard Foundation Partnership to Advance Microfinance for Youth
Freedom from Hunger announces the launch of Advancing Integrated Microfinance for Youth—AIM Youth—a $4.4 million partnership with The MasterCard Foundation. In this three-year initiative, Freedom from Hunger will design, test, and document youth-focused microfinance and financial education services benefitting 37,000 youth in Ecuador and Mali. Young people living in poverty are often expected to contribute financially to the household before they have the resources or knowledge to adequately respond. With this initiative, Freedom from Hunger will build the capacity of NGOs and MFIs to deliver appropriate microfinance services as well as the education needed to use those services wisely and effectively. The skills and tools acquired through AIM Youth can help young people meet their obligations and build the know-how to escape the poverty trap passed from generation to generation.
Rossana Ramirez, a specialist in youth financial education services, is leading AIM Youth. "AIM Youth was created in response to needs voiced by young people in the countries where we work," said Ramirez. "It helps young people who otherwise are left unprepared to manage a household with little money." By documenting the lessons learned from this initiative, Freedom from Hunger and its partners will extend the impacts of this value-added microfinance service to the "next generation" of microfinance clients while deepening impact within the families of current clients.
AIM Youth is launching first in Ecuador and Mali. In Ecuador, we will partner with Plan International and Cooperatives Santa Ana and San José, along with other financial institutions. Our goal is to reach 15,000 young people within three years. Youth tend to live in rural areas and be unemployed, and those who are employed tend to work in low-production activities, often in family-run businesses, domestic service or self-enterprise. Girls in Ecuador are very vulnerable to being stuck in poverty, as one in five girls aged 15 to 19 have had at least one pregnancy and many drop out of school. Boys are vulnerable, too. Ecuador has one of the highest rates of male adolescents migrating from rural areas to cities. Those who do not succeed in finding work sometimes turn to illegal and dangerous activities.
The 22,000 young people we plan to reach in Mali also tend to live in rural areas, where potable water and electricity are anything but common. Our Malian partners, Nyèsigiso and Kondo Jigima (federations of credit unions) and Tonus and CAEB (non-government organizations providing community services), will add their own resources and local expertise to the outreach effort. Mali's age-old tradition of early marriage means that many adolescent girls are married and often pregnant by age 19. Two-thirds of these young women are illiterate, as are half the young men. In Mali, where poverty and chronic hunger are so widespread, learning the concepts of money management and the discipline of saving will help young people build and protect assets.
Financial education will provide young people with the knowledge and skills to make better decisions about their money and develop concrete plans for the future. In both Mali and Ecuador, young people often turn to self-enterprise to earn money, a practice that can immediately benefit from a better understanding of how to manage money, plan ahead and set aside savings. Freedom from Hunger's proven learner-centered education is being adapted to the needs of youth, and new savings and credit products will be designed and tested as part of the initiative.
As is the case with all of Freedom from Hunger's initiatives, what we learn we will share. Research and documentation will be made available, not only to all Freedom from Hunger partners around the world, but also to youth-serving institutions and the larger microfinance and development community.
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