LEARNING

REPORT #1 Rural Youth Learning Agenda and

Enterprise Your Life Egypt Case Study

October 2014

IFAD Rural Youth Economic Empowerment Program (RYEEP)

(IFAD Grant Number: I-R-1419-MCI)

Prepared by:

Timothy Nourse and Anne Greteman Making Cents International

In Collaboration with:

Plan International—Egypt and Silatech

For:

Abdelkarim Sma Regional Economist

Near East and North Africa Division Development (IFAD)

January 31, 2015 Washington D.C.

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Contents 1. Executive Summary ................................................................................................................. 2

2. The Rural Youth Economic Empowerment Program Learning Agenda .................................. 3

2.1 The Challenge of Serving Rural Youth .................................................................................. 3

2.2 RYEEP Pilot Projects .............................................................................................................. 3

2.3 RYEEP Learning Agenda – The Starting Point: ...................................................................... 5

2.4 RYEEP Learning Topics .......................................................................................................... 6

3. Case Study: Enterprise Your Life Egypt – Informal financial services and entrepreneurship

training through savings groups in rural Egypt ............................................................................... 8

3.1 Project Summary .................................................................................................................. 8

3.2 Target Beneficiaries .............................................................................................................. 9

3.3 Financial Services Offered .................................................................................................. 10

3.4 Non-financial Services Offered ........................................................................................... 12

3.5 Project Results and Learning to Date ................................................................................. 13

Learning Topic 1: Financial Products that are Market-Based and Tailored to Rural Youth . 13

Learning Topic 2: Delivery of Appropriate Supportive Non-Financial Services ..................... 16

Learning Topic 3: Technology for Cost-Reduction, Alternative Forms of Finance ................ 17

Learning Topic 4: Linkages to Facilitate Informal to Formal Financial Services ................... 17

Learning Topic 5: Strategies for Scaling Products in Rural Environments ............................ 18

Conclusion ................................................................................................................................. 18

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1. Executive Summary With funding from the International Fund for Agricultural Development (IFAD) and in partnership with Silatech,

Making Cents International is implementing the IFAD Rural Youth Economic Empowerment Program (RYEEP); a

three-year grant to increase employment and self-employment of young people aged 15-35 in the Near East and

North Africa (NENA) countries of Egypt, Yemen, Morocco and Tunisia. The program provides capacity building

and technical assistance to local institutions to pilot youth-inclusive financial (YFS) and non-financial service

(NFS) delivery models to rural youth and to the enterprises that employ them. By 2016, RYEEP pilot projects will

reach more than 18,000 young people, facilitating formal sector or self-employment to over 3,750 youth and

delivering financial services to over 15,000 youth.

As important as these quantitative outputs is the knowledge generated by these five pilots; and thus a major

focus of the program is on capturing and disseminating this learning, with the goal of helping IFAD and youth-

inclusive financial services practitioners develop more effective and scalable programs for rural youth. The

program builds upon what we know works, to extend learning around five research topics:

Adapting and Developing Effective Financial Products for Rural Youth

Determining the Appropriate Level and Delivery System for Supportive Non-Financial Services

Using Technology to Lower Costs and Provide Youth with Alternative Forms of Finance

Linking Products or Institutions to Facilitate Movement from Informal to Formal Financial Services

Designing Innovative Approaches for Scaling Products in Rural Environments

While the program is just beginning, the pilot project in Egypt has already begun producing learning across these

research topics. The Egypt Enterprise Your Life project aims to reach 10,000 rural youth through a youth

savings group model that provides both savings and credit services, as well as life skills-based

entrepreneurship and financial literacy skills. After a little more than one year of operations, the project has

adapted an adult-focused VSLA methodology to rural youth, developed a youth-specific entrepreneurship

curriculum, and launched savings groups that are now serving 7,801 youth and counting. Experience to date

reveals that non-financial services are as or more important than financial services in motivating youth

engagement. In addition, the critical importance of using specific product development tools that are designed

for, target, and engage youth cannot be overstated.

This Learning Report is one of five learning products to be delivered by the RYEEP grant. It introduces the learning

agenda of the overall program and focuses on what has been learned so far from the pilot project in Egypt. It

will be updated at program end to capture lessons gained after publication.

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2. The Rural Youth Economic Empowerment Program Learning Agenda

2.1 The Challenge of Serving Rural Youth

Rural youth in developing countries make up a very large and vulnerable group. Globally, three quarters of the

poor live in rural areas, and about one-half of this population is young people. 1 This young and growing

population is confronted with a number of challenges to building sustainable livelihoods. The quality of

education in rural areas is worse than in urban areas and does not prepare youth adequately for existing

livelihood opportunities. The lack of basic infrastructure such as electricity and water supply limits livelihood

options and burdens youth with responsibilities that can reduce training and educational opportunities. While

agriculture is for many the most viable livelihood option, growing populations, the ongoing subdivision of land,

and soil degradation means that youth often lack access to or control of sufficient land for farming, thus

preventing or inhibiting their pursuit of this opportunity. Finally, for girls in particular, more traditional cultural

stereotypes in many societies reduce livelihood options to those within the household.

Nonetheless, rural youth are economically active and options exist for improving their livelihoods. In contrast to

urban areas, the problem for youth in rural areas is not one of unemployment, but underemployment. Youth

are active in a variety of farm and non-farm activities and for those who cannot pursue farming directly, the rural

non-farm sector can serve as the “ladder” from underemployment in low-productivity, smallholder production;

to regular wage employment in the local economy, and from there; to jobs in the formal sector.2 In this context,

the challenge for those interested in rural youth development is to develop the right mix of cost-effective and

appropriate financial and non-financial services that will increase youth capacity and access to the resources

that they can use to invest in farm or non-farm opportunities.

2.2 RYEEP Pilot Projects The five RYEEP pilot projects are designed to address many of these challenges and to test different financial

and non-financial service delivery models for rural youth. Pilots are implemented by local partners, including

commercial banks, microfinance banks, local community development organizations, and for-profit companies,

and supported technically by Making Cents International and Silatech.

Plan Egypt (Egypt) – RYEEP is supporting Plan Egypt (Plan) to modify its existing village savings

and loan (VSLA) financial model to meet the needs of rural young people in the form of a youth

savings group (YSG) model. Additional non-financial services, such as enterprise development

training, offered during savings group meetings or at partner CDA training sites, will help build

beneficiaries’ capacity to improve their income generating activities and effectively utilize

financial services (formal or informal). In addition, Plan Egypt is developing partnerships with

1 Bennell, Paul. Investing in the Future: Creating Opportunities for Young Rural People. Publication. IFAD, Dec. 2010, pg. 1. 2 Bennell, Investing in the Future, pg. 6.

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local, formal financial service providers (e.g. Alexandria Businessmen’s Association) to encourage successful YSG

members to graduate to formal services such as credit and formal savings accounts.

The project will demonstrate whether the large-scale outreach demonstrated by VSLA programs in other

countries can be replicated with rural youth. The additional training component through the YSGs will provide

information to practitioners on low-cost ways to serve youth with non-financial services, while linkage activities

will explore how informal savings can serve as a stepping stone to greater financial service access.

Al Amal Microfinance Bank (Yemen) – RYEEP is supporting Al Amal Microfinance Bank (Al

Amal) to develop and implement its “Rural Finance Strategy for Youth.” Al Amal has proven

successful in the development of youth-inclusive financial services in urban areas, and is now

looking to increase its capacity in rural and youth-inclusive finance and then translate these

skills into service delivery to rural youth. Al Amal is exploring a variety of Islamic products3 in

rural areas, including those for livestock, which will test models beyond the typical Murabaha

model.4 In addition to tailoring its financial products and service delivery to the rural youth

market, Al Amal is partnering with its sister organization, the Reyada Foundation, to develop

and test partnership models that assist in the delivery of non-financial services, such as training on finance,

entrepreneurship, and specific livelihood practices.

The project will demonstrate how a model of urban youth financial and non-financial products can be adapted

and delivered cost-effectively in rural areas.

Al Barid Bank (Morocco) - Through RYEEP, Al Barid Bank (Al Barid) is adapting its brand-new

youth savings product, Tawfir al Ghad (designed in partnership with Silatech), launched

nationally in June 2014, to better suit the distinct needs of the rural youth clientele. In

addition to savings, Al Barid Bank will also work with microfinance institutions (MFI) to link

qualified rural youth to formal enterprise lending options and to encourage MFI youth

clientele to open Tawfir al Ghad savings accounts and manage their loan disbursements and

repayments through these accounts. In addition to the financial service provision, Al Barid will use market

research to develop customized financial literacy training and outreach models to reach rural youth. Al Barid will

also seek out partnerships with other rural youth-focused organizations to embed these trainings into existing

outreach programs.

3 Islamic Products: financial products that are compliant with sharia law, e.g. do not charge interest 4 A form of Islamic lending that finances a specific good or asset for a fixed mark-up

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The project will provide learning about how large formal financial institutions can sustainably increase savings

services to rural youth. In addition, it will provide insights into how formal institutions can effectively partner

with MFIs to extend additional enterprise loans to young people.

Pro-Invest (Tunisia) - Leveraging its highly successful MobiWorks technology,

ProInvest will pilot MobiPOS, a mobile phone application to address supply chain,

inventory and transaction bottlenecks experienced by young rural shop owners

that by design will enable retailers to use a basic mobile phone to automate and record what they are doing

manually. This will create a formal transaction and credit history that can be used to access trade finance from

suppliers and to improve business performance through efficiency gains. The formal transaction data will also

be used as a proxy credit rating to help the retailers receive enterprise credit from microfinance institutions.

ProInvest will also provide supplemental non-financial services, such as training in business and financial

management, which will be customized to the needs of rural youth retail shop owners and delivered by partner

NGOs and via the MobiPOS platform.

This project will provide valuable insights into how value chain strengthening approaches can be developed

to serve rural youth. In addition, it will provide useful information concerning how to integrate technology

into rural youth support programs.

MicroCred (Tunisia) – RYEEP will support MicroCred, a newly established greenfield

MFI in Tunisia, in the design and development of Creations, the first small enterprise

start-up loan developed specifically for youth in Tunisia, with a focus on roll-out in rural

areas. The service will target start-up enterprises run by young people who are seeking financing in agriculture

and animal husbandry as well as those working within rural value chain linkages (handcrafts, fruit and vegetables,

clothing, etc.) In order to support its clients’ non-financial skills, MicroCred will partner with CESED, a Tunisian

non-governmental organization, to design, develop, and deploy a package of business development services

(BDS) in conjunction with the Creations product. The NFS will be offered both pre and post-financing and will

include concepts such as idea generation, business plan development, and financial literacy, bookkeeping, and

market access solutions.

The learning from this project will inform how best to serve rural start-up businesses through a combination

of financial and non-financial services. It will also provide information on the pros and cons of supporting

larger small enterprises as compared to microenterprises for rural youth.

2.3 RYEEP Learning Agenda – The Starting Point: RYEEP’s point of departure for designing the pilots is the strong body of practices that youth-inclusive financial

services practitioners have developed to guide the design and delivery of financial and non-financial services for

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youth. These practices can be summed in the following principles for the delivery of inclusive financial services,

also known as the Emerging Guidelines in Youth-Inclusive Financial Services. 5

1. Involve youth in market research and product development. Attention to the particularities of the

youth market and involvement of youth in product development processes may result is simple yet

critical changes to existing and new products and delivery channels.

2. Develop products and services that reflect the diversity of youth. The youth market contains sub-

segments related to age (legal age), life cycle stage (marital and parental status), gender, education,

employment status, and vulnerability. These differences should be taken into consideration in product

design and delivery.

3. Ensure that youth have safe and supportive spaces. Safe spaces help build youth’s confidence and

enable them to take advantage of opportunities. This may involve infrastructure considerations, delivery

mechanisms, and social networks.

4. Provide or link youth to complementary non-financial services. Non-financial services may include

mentoring, financial literacy, the cultivation of a savings culture, life skills training, and support in

livelihoods and workforce development.

5. Focus on core competencies by utilizing partnerships. Assess and complement institutional strengths

and weaknesses by collaborating with youth-serving organizations (YSOs), schools, training institutes,

and other entities, particularly in the provision of safe spaces and non-financial services.

6. Involve community. Involve the community—including family, schools, teachers, and other local

groups—to mutually reinforce and enhance the effectiveness of financial and non-financial services.

7. Establish institutional readiness. Ensure a strategic rationale for serving youth and establish

institutional readiness, including adaptable policies and appropriate staff capacity.

2.4 RYEEP Learning Topics Pilot project implementation under RYEEP will lead to learning around how these principles need to be adapted

for rural areas. In addition, Making Cents, IFAD and Silatech have decided to focus knowledge management

efforts on five learning topics of interest specifically to those serving rural youth.

Adapting and Developing Effective Financial Products for Rural Youth

Inspiration for effectively serving rural youth can be found in successful rural finance models for adults or youth-

inclusive financial service programs in urban areas. What are the key aspects of these products that need to be

adapted for successful rural environment delivery?

5 Making Cents International, December 2009

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Determining Appropriate Level and Delivery for Supportive Non-Financial Services

Rural youth tend to be more poorly educated, have fewer livelihood opportunities, and are harder to reach.

What financial capability or livelihood development services should be provided in rural areas, who should

deliver them – financial institutions, NGOs or the government, and how?

Using Technology to Lower Costs and Provide Youth with Alternative Forms of Finance

Making the business case for providing financial services to rural youth is especially difficult considering youth’s

general tendency to save less and demand lower loan sizes, combined with the low population density and poor

infrastructure in rural areas. How can technology lower the cost of financial service delivery to youth, whether

through financial institutions or value chain actors?

Linking Products or Institutions to Facilitate Movement from Informal to Formal

Financial Services

Youth capacity to use financial services develops over time as they grow in experience and knowledge. While

informal financial services such as savings groups may be appropriate for youth starting out, how can these

services be linked to formal financial institutions to provide youth with the greater variety and sophistication of

formal financial services?

Designing Innovative Approaches for Scaling Products in Rural Environments

Successful pilot projects can be scaled through the government – by policy changes or adoption of services by

government agencies, the market – by private sector companies or entrepreneurs seeing value in services and

offering them on a for-profit basis, or culture – when public awareness campaigns and behavior change

strategies become adopted by communities and new practices are propagated. Which scaling-up pathways are

appropriate for successful elements of RYEEP pilots and what strategies can be followed for expansion?6 7

6 Muthoo, Ashwani, David Francis, and Oanh Nguyen. IFAD’s Capacity to Promote Innovation and Scaling Up: Corporate-level Evaluation. Rep. no. 2240. IFAD, June 2010. Web. 7 Cooley, Larry and Kohl, Richard. Scaling Up- From Vision to Large-scale Change; A Management Framework for Practitioners. MSI and the Mararthur Foundation. March 2006

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3. Case Study: Enterprise Your Life Egypt – Informal financial services and

entrepreneurship training through savings groups in rural Egypt

3.1 Project Summary

The overarching goal of the Enterprise Your Life project in

Egypt is to increase employment and self-employment of

rural youth by increasing their access and ability to use

financial services, while simultaneously building their

employability and entrepreneurial capabilities.

This goal is broken into three supporting objectives:

Objective 1: Extend informal savings and lending services to 10,000 young people in three Governorates through a youth savings group (YSG) structure and link 500 YSG members to formal financial services.

Objective 2: Deliver financial literacy and entrepreneurship training through the YSG structure to 10,000 youth and additional supportive services to 1,000 interested YSG members from local Community Development Associations (CDAs).

Objective 3: Develop two practical knowledge products and host one event in Egypt that will support scaling up and replication of the model throughout Egypt.

Through RYEEP, Plan Egypt is tailoring its existing VSLA

financial model8 to meet the needs of rural young people in the form of a youth savings group model

(YSG). The YSG model will provide youth with access to capital to invest in individual or group income

generating activities (IGAs) while at the same time offering an opportunity for them to gather together

and learn from each other’s entrepreneurial experiences. Additional vocational skills training and

8 The VSLA model has demonstrated great impact on improving member assets around the world. In Egypt, Plan has been implementing the savings group model with adults since 2008 and has attracted over 80,000 members in very rural communities. In other countries, Plan serves up to 150,000 individuals and worldwide reaches over 1,000,000 people

Enterprise Your Life:

At a Glance Geographic area: Egypt— Rural sections of:

Assuit, Behira, and Giza governorates

Local Implementers: Plan International,

local Community Development Associations

and Financial Institutions

Financial Service: Youth Savings Group

model that provides savings and credit to

members; linkages encouraged to formal

savings and credit products

Non-Financial Service: Entrepreneurship

and financial literacy training

Impact-to-Date: 7,801 YSG members; 5,575

being trained

Beneficiaries: 10,000 Rural Youth, aged 16-

27

Duration: August 1, 2013 – February 19,

2016

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access to formal financial services will be facilitated to supplement the skill building provided through

the YSG. To ensure long-term sustainability of the project, Plan is implementing the Enterprise Your Life

program through community development associations (CDA) to both lower costs and as part of an

exit strategy to “replace” Plan in carrying forward the program.

The project has been designed to learn whether the large-scale outreach and impact demonstrated by

VSLA programs in other countries could be replicated with rural youth in Egypt. The additional training

component through the YSGs provides an opportunity to learn more about low-cost ways to serve

youth with non-financial services, while linkage activities help explore how informal savings and

lending can serve as a stepping stone to greater financial service access.

3.2 Target Beneficiaries

The population served under this project is categorized as follows:

Youth ages 16-27. Egyptian youth in this age range comprise two distinct segments. The first

are those aged 16-22, comprising students in secondary school and university, or recent

graduates. They are just beginning to become engaged in income generating activities and have

not utilized financial services in the past, formal or informal. The older segment, aged 23-27, is

in the process of establishing households and thus is more economically active and in some

cases, has utilized financial services in the past.

Geographic zones: The geographic areas of focus for

the project are in the rural parts of the Assuit, Behira

and Giza governorates. The target areas in Assuit are

the most rural among the three governorates, while

those in Giza and Behira are within reach of major

cities. This difference impacts livelihoods and

migratory patterns; in Assuit, livelihoods are more

dependent on agriculture and young men are more

prone to migrate to cities for work; in Giza and Behira,

there are a greater diversity of livelihoods and young

men are able to travel daily to major cities (Cairo and

Alexandria). Plan anticipates extending the program

to all of its program areas after the Pilot is completed.

Gender. Based on the gender composition of its current VSLA project, Plan Egypt expected that

65% of the project participants would be women. Initial participation was relatively higher for

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women, but Plan is making adjustments to increase male participation and expects to reach at

least 35% male participation by project end.

3.3 Financial Services Offered

Five different financial products are being provided under this project – three through the youth

savings group and two through linkages to formal financial institutions. See Table 1 for more

information.

How it works:

Local community-based organizations (CBOs) encourage YSG formation

and support their development. A community volunteer who receives

a small stipend from the CDA trains YSG members and supports

meetings. Members contribute savings through a share mechanism

each meeting and jointly decide on who can take loans and for how

long. The YSG cycle is between 9-12 months; at the end of the cycle,

individuals’ shares and the profits that accrued from lending activities

are paid out to members. The YSG then reconstitutes itself and begins

the cycle again.

Linkages to financial institutions are another financial service provided under the project. CDAs will

facilitate linkages to formal banks and MFIs by educating YSG members on financial products available,

inviting bank representatives and MFI loan officers to YSG meetings, and facilitating the completion of

loan requirements (collaterals, questions on loan applications, etc.).

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Table 1 Financial Services Offered

Youth Savings Group Financial Linkages

Product Share (term) Savings

Individual Credit Group Credit (Equity)

Enterprise Credit

Demand Deposit

Purpose Build assets for enterprise or consumption

Start or grow micro enterprise

Group investment in joint business venture

Grow micro enterprise

Build long-term assets

Amount 5-25 EGP per meeting (avg. of 15 EGP - $2.14)

By the end of the cycle, avg. of $42.8 per person per year (higher for groups that meet more than 2X a month)

3X accumulated savings

Range between $10-$75; estimated avg. of $28 (200 EGP)

Loans capped at $75 for first cycle for risk mgmt. purposes

UP to 100% of total group savings

Range between $50-$200

$150-$500 Minimum of 10 EGP ($1.4) for interest bearing account

Duration 1 cycle (9-12 months; 2-4 meetings per month)

1-6 months 1-6 months 3-6 months On demand

Interest rate

Variable – dependent on amount of loans disbursed

Variable - between 5-10% per month (group decides)

Variable – all profit returns to group

1-2% per month

Variable – currently 2% per year

Collateral None Accumulated savings

Group Savings Co-signer None

Other Total share savings and interest withdrawn at end of cycle (10-12 months)

Local CBOs will facilitate linkages; Plan will aid MFIs to adapt products

Local CBOs will facilitate linkages; Plan will aid commercial banks to adapt products

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3.4 Non-financial Services Offered

Non-financial services are also offered to youth participating

under the project. Youth participating in the groups receive a

foundational youth-focused enterprise development training

program, layered onto existing YSG meetings. The curriculum

used, Enterprise Your Life, focuses on the following topics:

thinking ahead, knowing your market, decision-making,

negotiation, wise investments, and being different. YSG

groups will also be offered additional technical and vocational

training by the CBOs on topics such as carpentry, soap making

and livestock-raising. See Table 2.

Enterprise Your LifeTM Curriculum:

Enterprise Your Life™ is an innovative, youth-focused curriculum built on coaching and applied learning

methodologies. The curriculum is designed to transfer key enterprising life skills to youth to enhance

engagement in a wide range of income generating activities. Through the use of short, targeted

sessions incorporating applied learning activities, interactive visual aids; and supplemented by on-going

coaching, youth develop the entrepreneurial mindset necessary for business success.

Table 2 Non-financial Services Offered

EYL Entrepreneurship Training Technical and Vocational Training

Delivery Vehicle

YSG Facilitator (local CBO staff) provides training after savings and credit activities

Local CBO hires experts to provide training at its offices or in community

Purpose Strengthen life skills and entrepreneurial knowledge to enable better enterprise management

Build technical and vocational skills that can be used in enterprise

Topics Planning Market Research Investing Negotiation Decision Making

Agriculture Livestock raising Carpentry Simple Electrical Engineering Soap making

Audience YSG members (10,000 youth)

Individual YSG members who request additional training (1,000 youth)

Approach Training and on-going coaching by YSG facilitator

Training

Duration 14-20 short sessions over 10 months (1 YSG cycle)

Variable – between 1 session on 1 day and 10-15 sessions over 3 months

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3.5 Project Results and Learning to Date

The project has only been implemented for a little more than one year at the time of writing, but the

project has already met more than half of its targets. Results as of December 31, 2014 include:

Indicator YSG9 Members10

No. of YSGs which were formed 580 7,801

% women members n/a 71%

Total of savings $42,626 n/a

No. of loans from YSGs n/a 232

Total amount of individual loans (cumulative) n/a $7,333

No. of loans from FSPs n/a 30

Total amount of loans from FSPs n/a $9,785

No. of members who can open bank account in formal financial institutions

n/a 7 ($686)

No. of YSGs/Members receiving EYL training 376 5,575

% of respondents increased/applied knowledge (avg.) 75% 25%

No. of YSGs/Members receiving technical training 14 215

No. of members who improved IGA with training n/a 170

No. of members who started IGA with training n/a 113

During the initial implementation stage, Making Cents and Plan have gained learning in a few of the

areas covered by the RYEEP Learning Agenda. The section below describes learning to date or areas

that the project hopes to learn from over the life of the project.

Learning Topic 1: Financial Products that are Market-Based and Tailored to Rural Youth

The initial assessment process highlighted the importance of a rigorous product development process

that considers all aspects of product design when adapting products to rural areas.

Follow an intentional assessment and design process for best results

Since Plan International had already been implementing a savings group program for adults that had

attracted some youth, staff members initially thought that only a simple rebranding without changes

to the model or training would be necessary to deliver the product for youth. However, by following a

rigorous product design process, key differences were discovered that significantly influenced the final

products.

9 YSG= this column reports on groups 10 Members= this column reports on individuals

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Process. Making Cents and Plan followed a three step product design process which took time,

but led to a product well-tailored to youth needs. An initial assessment provided the necessary

information for the team to develop product prototypes. For example, a key finding was that

the nonfinancial training program should focus on the life skills underlying entrepreneurial

behavior, rather than emphasizing entrepreneurial content alone (market studies,

pricing/costing, record keeping). A field testing phase provided important feedback regarding

the prototype financial product and training curriculum. In this case, increased flexibility around

group meeting sites and the frequency of meetings was allowed based on initial feedback. A

pilot phase then gave the team additional information that allowed final tweaks to the

products. To respond to the relative lower number of men in the program, one change included

expanding the age range to incorporate younger members who had expressed interest in the

program as well as older males who had returned from military service and had more time to

participate in the program.

Specific Tools. The overall design process was informed by the seven YFS principles, with

specific tools for the financial and non-financial sides of the product. For the financial product,

background research, key informant interviews, and focus groups guides were developed

around Making Cents’ 9P financial product development tool. For the non-financial product,

research tools were developed to gain information according to Making Cents’ 11 S’s of

curriculum design and training delivery systems framework. The two tools break down

products into their component parts, ensuring that the assessment and pilot evaluation focuses

not only on the outward facing features of a product, but also the internal training and systems

modification necessary for successful delivery. For the financial product, use of this detailed

tool provided insights into specific changes, such as extending the loan repayment period to six

months to allow less experienced youth entrepreneurs more time to repay loans. For the non-

financial product, the 11 S’s framework influenced the content, delivery method, and training

of trainer methodology. A summary of the tools and framework is included below in Box 1.

Table: Financial and Nonfinancial Services Tools and Frameworks

11 S’s of Curriculum Design and Training Delivery Systems Framework

9P Financial Product Development Tool

1. Student: Profile of learners, literacy levels, and learning preferences

1. Product: Terms and conditions, requirements, documents for account openings, guarantees (co-signers), etc.

2. Setting: Conditions, timing, and pacing of delivery

2. Price: Interest rate, fees, penalties, transaction costs, etc.

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3. Scale: Content and time to deliver 3. People: Human resources; hiring, training,

performance monitoring (incentives), etc.

4. Sequence: Other curricular content before or after this training

4. Promotion: Marketing, advertising, public relations -- (formats and delivery channels)

5. Scope: Knowledge, Skills, and Attitudes contained in curriculum

5. Positioning: Competitive advantage or niche as perceived by target customer

6. Style: Learning/teaching methodology 6. Place: Distribution and delivery channels,

branches, outreach workers or field agents, ATMs, mobile units

7. Skill-set: Skills needed to deliver, supervise, and coordinate the rollout of training program

7. Physical evidence: Passbook, promissory note, etc.

8. Sale: How much of the organization, marketing, funding, and delivering can be cost recovered

8. Process: Systems, manuals, operating procedures, forms, queues, turnaround time

9. Supplies: Supporting materials (training guides, TOT guides, participant takeaways, facilitation materials, equipment/ technology, M&E tools)

9. Preparation: Design of nonfinancial service package

10. Systems: Delivery system, monitoring, and capacity building

11. Success : Assessment of the reach, depth, and quality of outcomes and impacts

When adapting adult products for youth, who delivers and where are as important as product

features

Since the savings group model is very flexible, allowing each group to develop its own share price,

lending terms, and meeting times, the initial assessment did not recommend many changes to the

overall design. However, during the pilot phase, initial outreach was hard, especially to young men,

who comprised only 29% of the participants. Follow-on research noted that the implementing partners

hired the same type of promoters for the adult program as for the youth program – adult women.

However, adult women did not have networks among men or young women to facilitate recruitment,

and in the more traditional rural area, young men perceived the program as “for women” due to the

promoters’ gender. Similarly, there was no attempt to rebrand the program and it was simply called

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“the savings group program”, a name which inaccurately conveyed the full-range of activities included

in the program and had the connotation of an “old-woman” program. In response, CDAs are now hiring

and training younger and more male promoters and the program is being rebranded as “Enterprise

Your Life.” This difficulty underlines the need to assess more closely along the full range of features,

including the marketing and outreach mechanisms, in order to develop a successful product for youth,

especially for products that serve both young men and women.

Learning Topic 2: Delivery of Appropriate Supportive Non-Financial Services

The Egypt pilot demonstrates the importance of life skill development for youth and the potential of

savings groups as a cost-effective model for non-financial service delivery.

Foundational life skills are critical to the development of entrepreneurial behavior

The non-financial services assessment indicated that youth “knew” what entrepreneurship was and

had role models who were good entrepreneurs. However, they lacked the confidence to begin and did

not have the negotiation, communication, planning, or idea generation skills to apply this content in a

livelihood of their own. In response, Making Cents developed the Enterprise Your Life curriculum which

focuses on the practical development of enterprising life skills. The assessment also indicated that

youth learned from mentors and appreciated on-going support. As a result, Making Cents incorporated

a coaching component to the program that uses the metaphor of sports to introduce the YSG promoter

as a coach who could provide advice on the utilization of training content. The curriculum was designed

as short, targeted drills that enable “practice” and hands-on learning for continual development of

skills, allowing youth to experiment then seek coaching advice from other members and the promoter.

Initial implementation of the curriculum indicates that the focus on life skills and coaching is paying off.

Youth participants in YSGs report that the Enterprise Your Life curriculum is their favorite part of the

program, and they see their coach as a “brother or sister who can help guide them” to start new income

generating activities.

Savings groups are a cost-effective way to deliver non-financial services.

In Egypt, the cost per savings group member for Plan’s adult program is $18. Under RYEEP, once the

pilot is tested, Plan anticipates that the cost of delivering the YSG model will $38; higher due to the

increased cost of the curricula and training of promoters, but still quite low considering other

interventions of this sort. Besides being cost-effective, we anticipate that the impact will be quite high,

because unlike other non-financial services programs, through savings groups, youth develop both the

financial resources to invest in the form of their savings or lending from the group as well as the

knowledge to apply the resources. Initial survey results substantiate the potential of this combination

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of services: a survey of 1,000 participants who had finished half of the curriculum resulted in 75% of

participants reporting that they increased their knowledge, 25% indicating that they have applied their

knowledge, and on average 20% noting that they used the information to start or improve an income

generating activity.

Learning Topic 3: Technology for Cost-Reduction, Alternative Forms of Finance

Savings groups, as decentralized structures managed by the groups themselves after the first cycle, are

a low cost means of providing financial services. Accordingly, the program’s primary technological focus

has not been on using technology to lower costs, but instead for communication and linkages purposes.

To date, some promoters have found that using Facebook is a successful way to promote the program

to young people in the area, as well as to generate buzz and reinforce training topics. Regarding

linkages, the project will experiment with the use of prepaid debit cards to serve as the “virtual savings

box” for youth groups. The cards may prove to be a more secure means of storing excess savings and

will familiarize members with formal financial institutions.

Learning Topic 4: Linkages to Facilitate Informal to Formal Financial Services

The project aims to link savings group members to formal financial institutions via three strategies:

1. Build YSG member financial capability to prepare them to access formal financial services.

The project anticipates that YSG members will both be more ready and more willing to

access formal financial services after participating in YSG groups.

2. Educate microfinance institutions on the value of YSGs for developing good clients for their

services. By discussing the program, sharing statistics about savings and lending rates, and

inviting representatives to group meetings, project staff will make MFI staff more

comfortable with extending services to younger clients that have completed the YSG

project.

3. Promote formal financial services to YSG members through promoters and MFI outreach.

Project staff will actively promote the project to YSG members, recommending those whose

savings and credit needs have surpassed YSG capabilities to local MFIs and helping them to

complete applications, find guarantors, etc.

Linkages are not expected to occur until participants finish at least the first cycle of savings group and

even more after they complete the second cycle. Nonetheless, by December 31, 2015 prior to any

savings group cycles finishing, 30 savings group members had received loans from Microfinance

institutions valued at $9,785 USD based on the linkage efforts described above.

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Learning Topic 5: Strategies for Scaling Products in Rural Environments

The Rural Youth Economic Empowerment program focuses on the first two stages of IFAD’s

“Innovation, Learning, Scaling Up” framework.11 During the project, innovative pilots are being tested

to develop learning about what works. Afterwards, IFAD will scale up the ideas with the most potential

through partnerships with the government, private sector, and/or communities. For the RYEEP Egypt

pilot project, Plan will test whether this innovative youth savings group model is effective and low cost,

then consider how to scale it. Initial thinking is that if sufficiently cost-effective, government agencies

and/or local CDAs may adopt the model as part of their youth development strategy. Plan is also

considering whether promoters may provide training on a fee-for-service basis, but has concerns about

whether strategy is really viable with low-income youth. Plan will complete a full Scaling-up plan by

September 2015.

Conclusion

The Enterprise Your Life pilot has been designed to generate learning around the appropriate mix of

financial and non-financial services, strategies for linking informal and formal finance, and a low-cost

model that has the potential for scaling up. Initial results are promising, though much more will be

known as groups finish their first cycle and a more in-depth evaluation can take place. This brief will be

updated as results become known, with a final version available in 2016.

11 Linn, Johannes F. Scaling Up Development Impact: An Introduction. Nairobi, Kenya: IFAD, 13 Oct. 2013. PPT.

Figure 1: IFAD RYEEP Approach to Effective Scale up and ROI

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