Silatech and Al Barid Bank, banking branch of the Moroccan Post signed an agreement to provide financial access to tens of thousands of young Moroccans through an innovative new youth savings initiative. The agreement was signed in Casablanca by Mr. Redouane Najm-Eddine, Chairman of the Board of Al Barid Bank, and Dr. Tarik Yousef, Chief Executive Officer of Silatech, with the presence of Mr. Amin Benjelloun Touimi, the Moroccan Post Group CEO.
The initiative will enable young Moroccans aged 18-25 to build their financial assets by opening a youth-specific savings account at any one of Al Barid Bank’s network of branches across the country. Set to be available for youth by the end of summer 2012, this Youth Savings Account (YSA) initiative draws from global industry best practice, and includes a range of features designed to meet the needs of youth while encouraging active savings.
These features include a very low minimum opening balance, a voluntary lock-in mechanism, and a facility that matches youth deposits into the account up to a maximum amount for the first 20,000 accounts opened. Further incentives to save include quarterly prize draws for all account openers and annual prize draws for youth who meet certain savings milestones.
This Youth Savings Account represents one of the largest new financial product deployments in the Middle East and North Africa (MENA) region.
The YSA will be marketed through an extensive promotional campaign, which will also incorporate key messages to youth stressing the benefits of savings, as well as motivating young people to save more. Al Barid Bank and Silatech also intend to partner with media outlets, educational institutions and youth-serving organizations in raising awareness and promoting positive savings behavior among young people.
To further reinforce positive savings behavior, the YSA will be offered by ABB staff who have been trained and attuned to the specific needs of young people. Frontline bank staff will also provide financial literacy advice for all youth opening YSAs.
The expected impact of this initiative is to encourage other forward-thinking financial institutions, as well as youth serving organisations, to think about helping young people learn smart financial habits early on in life, as well as to make available savings schemes that will help them accumulate capital for starting a business, getting married, or help in other important life stages.
This partnership between ABB and Silatech forms part of a broader regional partnership between Silatech and the German Agency for International Cooperation (GIZ), supported by Sanabel, which was announced earlier this year. This collaboration aims to provide youth savings initiatives for low-income youth in the MENA region through projects in Morocco, Egypt and Yemen. This initiative aims to provide evidence which will serve to influence practitioners and policymakers, driving the development of more youth savings programs.
For Silatech, the focus on youth savings in the MENA region is critical to its overall mission and vision. According to Silatech’s CEO Dr. Tarik Yousef, “Micro-savings are widely recognised as driving financial inclusion by providing an entry point into the formal financial sector, reducing vulnerability to economic shocks, evening out irregularities in income, and creating collateral for lending to support business start-up and growth. However, the MENA region has the world’s lowest levels of access to formal savings instruments, according to a recent World Bank study.” He continued: “Therefore, creating and expanding youth savings opportunities in the MENA region is a major goal for Silatech, and our partnership with Al Barid Bank, is highly strategic for this region.”
For Al Barid Bank, this focus on the provision of youth savings for low-income communities also aligns with their strategic priorities.
Mr Redouane Najm-Eddine, Chairman of the Board of Al Barid Bank said in a statement, “The Bank is executing and expanding on its mandate to provide mass banking services to disadvantaged and underserved segments of the population in Morocco. Given our focus, this initiative with Silatech and partners is key to increasing financial inclusion for low income youth.
This partnership in Morocco builds upon Silatech’s youth-focused micro-enterprise programming in five countries. With 12 financial institution partners, its youth microenterprise programmes have impacted over 40,000 young people to date and have helped more than 15,000 youth-run businesses start or grow, making Silatech the largest youth micro-enterprise support services provider in the Arab region.
Before joining SME Advisor, I worked as a producer/reporter for Forbes Media in New York. I obtained a Bachelor’s degree in Journalism and International Studies at the University of South Florida in the US. I am currently in Dubai working as Sub-Editor for SME Advisor Middle East, which is a business magazine published by CPI. You can follow me on Twitter: @joumanasaad or @SMEadvisorME and (Joumana Saad) or (SME Advisor) on LinkedIn.