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This working paper deepens the analysis on inclusive finance and rural youth through cutting-age research and new insights and approaches that have emerged over the years in the field. The overall narrative clear ly documents the ways in which rural youth engage with the economy, policy and institutions and identifies the rapid changes occurring across the globe as well as the opportunities and challenges that young people living in rural areas encounter in their different livelihoods. Within this context, financial inclusion has gained attention as a key contributing factor to unlock the potential of rural youth in driving sustainable and inclusive rural transformation. This paper investigates how recent developments in this sector entail new opportunities for rural youth, and highlights persisting barriers that prevent rural youth from accessing financial and non-financial services, making the case for a market system approach to financial inclusion with specific attention given to digital finance. The youth employment challenge is a global development priority. In many developing countries, high youth unemployment rates, significant proportions of working poor in vulnerable employment and economic disengagement together pose the risk of creating disaffection, driving migration, inciting social unrest and slowing progress toward development goals. The paper documents the increasing body of evidence about the positive link between financial inclusion and individual welfare, business creation and women’s empowerment but also highlights the body of research that questions such a positive narrative, pointing out the lack of a sound and functional financial inclusion ecosystem.


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