Advancing Integrated Microfinance for Youth
In December 2009, Freedom from Hunger launched Advancing Integrated Microfinance for Youth—AIM Youth—a $4.4 million partnership with The MasterCard Foundation.
Through this three-year pilot program, Freedom from Hunger is designing, testing and documenting youth-focused microfinance and financial education services for 37,000 youth in Ecuador and Mali.
Young people living in poverty are often expected to contribute financially to the household or support themselves before they have the resources or knowledge to do so effectively. Freedom from Hunger works with local NGOs (non-governmental organizations) and MFI (microfinance institution) partners to deliver age-appropriate financial services as well as the education needed to use those services wisely and effectively. AIM Youth helps young people meet their obligations and acquire the knowledge and skills to escape the vicious cycle of trans-generational poverty.
By documenting the lessons learned from this pilot program, Freedom from Hunger and its partners are extending the impacts of this value-added microfinance service to the "next generation" of microfinance clients, while deepening impact within the families of current clients.
Innovations for Youth in Ecuador and Mali
In Ecuador, Freedom from Hunger is working with partners Cooperatives San José, San Miguel de los Bancos and Cooprogreso. Leveraging their local knowledge and experience allows Freedom from Hunger to scale quickly, with a goal of reaching 15,000 young people in Ecuador over the first three years.
Youth in Ecuador, especially those in rural areas, are more likely to live in poverty and are less likely to have regular employment. Those who do have jobs tend to work in low-production activities—often in family-run businesses, domestic service or micro-enterprise. Girls in Ecuador are particularly vulnerable to long-term poverty. One in five girls between the ages of 15 and 19 has had at least one pregnancy, causing many to drop out of school. The challenge facing boys is different, but no less difficult. Because there are few jobs in rural areas, Ecuador has one of the highest internal migration rates, with male adolescents moving into the cities in search of economic opportunity. Those who do not succeed in finding work sometimes turn to illegal and dangerous activities.
In West Africa, AIM Youth will reach 22,000 young people in Mali. Malian youth tend to live in rural areas, where potable water and electricity are rare. Freedom from Hunger’s local partners, Nyèsigiso and Kondo Jigima (federations of credit unions) and Tonus and CAEB (NGOs) are adding their own resources and local expertise to support the outreach effort.
In Mali, a tradition of early marriage means that many adolescent girls are married and pregnant by the age of 19. Two-thirds of these young women and half the young men are illiterate. Because poverty and chronic hunger are so widespread, sound money management practices and the discipline of saving help AIM Youth participants to build and protect their assets.
Making the Transition to Adulthood
Financial education provides young people with the knowledge and skills to make better decisions about their money and to develop concrete plans for the future.
In both Mali and Ecuador, young people often turn to micro-enterprises to earn money. By teaching participants how to manage money, plan ahead and set aside savings, Freedom from Hunger's proven learner-centered education is being adapted to meet the needs of youth. New savings and credit products are being designed and tested as part of the initiative. The combination of financial services and practical financial skills is helping participants be more productive in their business and personal financial lives.
Freedom from Hunger maintains a deep commitment to sharing what we learn with the rest of the community of practice. Research and documentation are shared, not only with our partners around the world, but also with youth-serving institutions and the larger microfinance and development communities.