Research on Youth Financial Services

Recently, I have been doing desk research for my thesis research on youth financial inclusion in Indonesia. This has amounted to several documents that, as a researcher living in Bali for the past five months, I am very proud to have finished today. They include a terms of reference which includes the research plan, a literature review, an interview protocol, a 70-item panel data form, and even a pitch for the documentary that I have yet to start shooting! I’ve also hired two master’s-degree holding research assistants to help me out with translations, field testing and the actual data collection.

Originally, I applied for the Boren fellowship requesting research funds to study client protection in Indonesia, which with the impending or recent collapse of entire countries’ microfinance markets (Nicaragua, Morocco, Serbia and Andra Pradesh, India to name a few) is quite a pressing issue now. I had worked at the Center for Financial Inclusion and it seemed that I could attend some of the trainings on client assessments and actually learn what to do to find out a MFI is getting into big trouble with protecting their clients.

Then, in May of last year, I attended the launch of YouthSave at the New America Foundation, a new research initiative about the asset effects and business case for youth financial services in developing countries. Apart from the joy of drinking cocktails with my all-time research hero, Michael Sherraden, I think that day planted a seed in me. Later that summer, my mentor at RTI, Andrew Baird, pointed me to the Making Cents YFS Links website, and introduced me to his former colleague who now manages YFS, as well as the head of the microfinance association in Indonesia. And after reading everything about youth financial services, I realized there is almost nothing written about youth financial services in Indonesia (except for one World Bank study carried out in 2006). In fact, when I met with Micra Indonesia, the research body that is the author of that study, a representative there said there isn’t really a culture of publishing research in Indonesia.

One of the most rewarding things about the past few months is that many people have been very generous with thier time in helping me with their feedback on the tools, including Johnny Kim of Kansas University’s Social Work School, Payal Pathak of the New America Foundation and RTI colleague Andrew Thornley.

One of the most challenging things that I have encountered thus far is that there isn’t really any methodology about conducting market research on youth financial services. Unlike CAMELS or the SEEP financial assessment tool, the market research tools for youth financial services are income-generating patents that are packaged and sold by Making Cents, MicroSave, Chemonics and AYLDAC.

So this is where I step in. Research questions include: How and why do youth use financial services? What do they want from financial services? and How do youth balance access to financial services with thier opportunity costs?

I will be sharing more updates about my research hopefully around mid-March. I will be in the field, mostly likely in rural Bali, testing the interview protocol.

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