Remarks by His Excellency Denis Antoine

Financial Literacy Alone is Not Enough

The Young Americas Business Trust (YABT) believes that “financial literacy is the fuel that will drive sustainable and healthy consumer confidence” in today’s economy and into the future. The financial literacy which YABT promotes is global financial education which looks at a brighter future for the Americas and our global partners.  We applaud Operation HOPE for the initiative of this Global Financial Literacy Summit, and we are very pleased to participate.

Reference is made of a May 2006 report prepared by the Micro, Small and Medium Enterprise Division of the Inter-American Development Bank (IDB) on young entrepreneurship in Latin America entitled “Is Youth Entrepreneurship a Necessity or an Opportunity”. That report suggests that young adults attempting to set up business soon after leaving high-school are highly vulnerable to business failure if not provided with sufficient academic and entrepreneurial training before entering the business world. In addition to young entrepreneurs who are out of school, it is necessary to target those at the high school or tertiary levels who may soon embark on an entrepreneurial endeavor.

The same report suggests that young entrepreneurs in Latin America face less favorable conditions in starting their own business due to lack of institutional support, access to production networks and finance.

The Young Americas Business trust founded a little over ten years ago under the vision and leadership of CEO Roy Thomasson has undertaken to address these problems by providing both hands on entrepreneurial education as well as linkages which point to finance sources, production networks and technology.

YABT recognizes that business and financial literacy deficits translate directly into increased levels of unemployment and the cycle of intergenerational poverty. The limited size of the formal wage sector in many communities and countries such as in the Caribbean and rural areas of Latin America, means there are fewer job openings than there are young people leaving school or already in the labor market seeking employment.

This condition is also aggravated by a lack of articulation between courses taught in traditional education systems and the demands of the labor market for wage or self /entrepreneurial employment.

Limited opportunities for continuing financial education beyond the primary or secondary levels and the inability of the formal labor market to absorb the numbers of youth leaving school each year diminish the level of employment opportunities available to young people in the region.

The (YABT) considers financial education for young people of the Americas to be an indispensible element for the consolidation of stronger democracies and sustainable development.  In this regard YABT has made its “Money Links” curriculum a centerpiece of its financial engagement with young entrepreneurs.

  A primary objective of YABT is to help youths recognize the importance in building relationships with financial institutions by helping them to become familiar with banking terms major financial institutions types of account and other banking services.

YABT believes that young entrepreneurs improve their chances of success in business, when young people are familiar with basic financial concepts and understand the functions and types of financial institutions, and recognize the convenience of using financial systems.  

Opportunities must be provided for young people before they get into business to be able to identify different products and services that financial institutions offer and understand how to use them, and to become familiar with the electronic banking systems.

Based on the on-going financial crisis, the issue of money safety is being addressed by YABT. The introduction to the Financial System and money security, the cost of money and insurance and financial future are necessary elements of sound financial literacy.  

YABT believes that banking and banking language and terms used in the industry needs to be introduced as an integral part of the global financial literacy.  Young entrepreneur needs to be familiar with services as part of the functional knowledge both as a consumer and as service providers.   Knowledge of the modern on-line and Automatic Teller Machines (ATM), the electronic cards, and debit cards and now merchants and store cards is essential.  In the developing countries where tourists present these forms of payment foreign exchange is lost when these forms of payment, cannot be accepted by the small enterprises.

Addressing the needs of young people is now more critically important than ever and is a responsibility of each one of us especially those with the authority and means in all societies.

There are now over 1.5 billion young people ages (12-24) in the world –“according to the,” World Bank Development Report 2007: entitled Development and the Next Generation, (Washington, DC): the largest number in the history of our world with 1.3 billion of these individuals residing in the developing world. This is according to statistics provided by the World Bank publication named Youth in Numbers (2005); young people under the age of 35 comprise an average of over 50 percent of the population in Latin American and Caribbean countries.

The Young Americas Business Trust believes that the future prospects of the youths of our hemisphere are strongly tied to action learning by incorporating business education as the hands-on lab does in science classes; therefore YABT has adapted a specific training methodology which includes intensive training workshops which introduces fundamental concepts of entrepreneurship, leadership and personal development.  

This course is supplemented by on line training material.  YABT believes that financial education and literacy alone is not enough by itself but indeed an essential part of the process.  YABT believes that the youths of this hemisphere and globally require motivation, improvement of self confidence, for innovation. The development of communications, negotiation and team working skills, are needed as a definite forms of motivation to self- employment and business creation.  Financial education must be a part of these initiatives.  

YABT believes Business formation training, opportunity analysis, market research, finance production and sale of real product must be introduced to our youths hands-on.   The Young Americas Business Trust serves as a one stop connecting point resource center for young entrepreneurs, where after care for start up enterprises through its “Next Link” initiative is provided.  YABT believes in increase entrepreneurs’ management capacity and venture survivability, through increased access to mentoring, incubators, alliances with financial institutions, business plan development, and working with local governments schools and community.  

Follow up and follow through, is required.  On going and regular contact with young people in business startups is essential to success.  YABT therefore supports consulting, volunteer mentoring, networking links to allied micro-credits and other financial institutions.

Financial education and literacy is complementary to YABT’s on- going efforts.  We have found a cost effective approach to providing in the field financial education which is derived from the fact that the substantial part of the expenses are in content development and the testing phase.  YABT has learned how to maximize funds impact through on line distribution and in-country, activities. Substantial advantage has been gained through leveraging to get the best long term results.   

Ladies and gentlemen, the success of the YABT initiatives in collaboration with the Organization of American States Inter-American System, (OAS) need more than admiration and verbal support. Words must be backed by action, because financial literacy alone is not enough. More reliable support by governments and democratic institutions is needed to teach young people money management, budgeting, savings and investment skills, about the use of credit, and the details of these complicated maneuvering of business finances and daily living.  I urge governments, corporations, development agencies, foundations and the private sector to reach out to YABT at www.ybiz.net

I thank you.

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