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Chowa, G. | Masa, R. | Johnson, L. | Osei-Akoto, I. | Sherraden, M.
2012 | Ghana

Determinants of youth savings in Ghana

Financial Inclusion

Purpose: Most studies investigating impacts of savings have focused on adults or those 18 years and above. Few empirical studies have investigated savings impacts on children and youth (Chowa & Ansong, 2010; Ssewamala & Ismayilova, 2009). Although evidence suggests there is demand for children and youth savings products and services (Masa, et al. 2010), including in developing countries, little is known about the impacts of saving among this population. Despite little empirical evidence, a growing number of financial institutions, nonprofits, and governments have initiated youth savings products in many countries, including emerging nations in Sub-Saharan Africa. This study examines impacts of savings among young people, ages 12 to 18 in a 5 year experiment in Ghana.

Method: This study uses data from the YouthSave Ghana Experiment. YouthSave is a pioneering project designed to increase savings and development among low-income youth in Colombia, Ghana, Kenya, and Nepal. The Ghana Experiment uses a cluster randomized design, with 100 schools randomly selected from 8 of Ghana’s 10 regions. Fifty-schools were randomly assigned to a treatment condition and another 50 schools were randomly assigned to a control condition. In each of the 100 schools, at least 60 students were randomly selected to participate in the program. The structured savings in this study are tailored to meet the needs of youth including account features such as no fees, and $5 minimum balance requirement, and interest on savings. We will report savings impacts in the experiment.

Results: The study sample size is 6,252 youth. An equal number (n= 3,216) of youth were assigned to treatment and control. Seventy-three percent of youth surveyed at baseline have a parent or guardian who was also surveyed at baseline. A little over half of the youth (52%) are girls. The average age is 15. The mean household monthly income is 204 GHC or approximately 118 USD. Savings impacts are compared between treatment and control.

Conclusions: Individual and socioeconomic differences exist among youth and their families. These differences, as previous empirical research has shown, may influence the savings performance of young people. As young people assume adult economic roles and responsibilities and increase their interactions with informal and formal financial institutions, understanding how savings interventions impacts youth savings over a lifetime is critical. The better we understand youth and their savings outcomes, the more effectively financial institutions and public policy can create savings products and services that meet current and future demand.

Chowa, G., Masa, R., Johnson, L., Osei-Akoto, I., & Sherraden, M. (2012, November). Determinants of youth savings in Ghana. Paper presented at the 17th Association for Public Policy Analysis and Management Fall Conference, Baltimore, MD, November 8–10.