IYC 10 — Youth-Driven Financial Reform

Host

Good afternoon everyone, and welcome to today's session on youth-driven financial reform and sustainable development: accelerating equitable finance and entrepreneurship. We're excited to have you all joining us as we explore how young leaders can shape financial systems to promote sustainability, equity, and entrepreneurship. Over the next 30 minutes, our distinguished panelists will discuss the role of youth in driving financial reform to create more inclusive systems that serve marginalized communities and foster entrepreneurship growth.

Nowadays, the call for reforming the international financial architecture has gained unprecedented momentum, driven by the urgent need to make financing more inclusive and responsive to modern challenges. The UN Secretary General, António Guterres, has emphasized that the current financial system, largely shaped by institutions created in the mid-20th century, is failing to address the needs of the developing world. He called for a wholesale reform, arguing that many countries, particularly in the Global South, are trapped under unsustainable debt burdens, limiting their ability to invest in critical sectors like health, education, and climate action.

The Secretary General's proposals include increasing liquidity for developing countries, restructuring debt, and reforming governance within key financial institutions like the International Monetary Fund and the World Bank. Today, we will focus on how young leaders can drive these crucial reforms by reshaping the financial architecture.

Host

Given your background, Yuen, let me start with this question: How can social justice be integrated into financial reforms to create fairer economic opportunities? What role do public policy and advocacy play in embedding equity within financial systems?

Yuen Yen

Thank you for the question. The topic of financing for the Global South has been prominent during New York Climate Week, as many discussions revolve around how to accelerate funding for these regions. Unfortunately, most climate finance is still concentrated in the Global North because financial institutions tend to prioritize guaranteed profits and low-risk investments. This has created a situation where the capital costs associated with investments in developing countries deter potential investors.

It's critical to note that the perceived risks are often exaggerated and can distort reality. Many financial institutions view investments in developing countries as high-risk due to climate and political instability. However, many of these risks are based on misconceptions rather than actual data. Thus, we need to focus on improving transparency and access to information about these regions.

One approach to addressing this issue involves bringing the stories of marginalized communities—those who are most affected by climate change—to the forefront of financial discussions. As a former campaigner in Taiwan, I worked on documenting the challenges faced by local communities, including farmers and indigenous groups, who contribute little to carbon emissions yet bear the brunt of climate impacts. By amplifying their narratives, we can compel decision-makers to understand the urgency of reforming financial systems to prioritize equity and sustainability.

Host

Evie, as an entrepreneur and venture strategist, what innovative financial mechanisms, such as microfinance or digital finance platforms, have you seen expanding opportunities for youth and marginalized groups? How can these tools be scaled for greater impact?

Evie Chen

Thank you for the introduction. This is a big topic, and none of us has the obvious answer. From my own personal experience, I believe we need to rethink how we approach entrepreneurship. When we think about entrepreneurs, we often envision someone who is glamorous and successful on television, someone who raises millions in funding. However, I believe the focus should be on making small businesses successful, as they are the backbone of our economy.

My entrepreneurial journey started with limited resources. What I had was my story—every family has its history, skills, and discipline that can be harnessed in entrepreneurship. Starting from nothing meant I had to learn how to support myself and build a business that could thrive in its community. The key is to make small businesses work, as they often serve local needs more effectively than large corporations.

To achieve this, we need to explore different forms of capital that can support small businesses. Innovative financial mechanisms, such as microfinance and digital finance platforms, can provide access to resources that are often lacking. However, it's not just about providing funds; it's about changing the narrative around entrepreneurship.

Host

What are the critical reforms needed to empower youth-led initiatives?

Evie Chen

The essence of financial institutions is their focus on risk. Youth are often perceived as risky investments because they lack experience and a financial track record. However, we must trust innovative ideas and the potential of young people. Many successful ventures have emerged from trial and error.

Creating environments that encourage experimentation is crucial. One approach could involve implementing regulatory sandboxes, where startups can test their ideas without stringent regulations. Furthermore, we need to create a culture of mentorship and support. By pooling resources and knowledge within communities, we can foster an environment where young entrepreneurs feel safe to take risks.

Yuen Yen

I love the concept of a sandbox. It provides a safe space for entrepreneurs to develop their ideas without the pressure of strict regulations. However, we must also consider the inherent risks that entrepreneurs face. Starting a business often means stepping into the unknown. To reduce uncertainty for investors, we must enhance transparency in financial markets and improve access to information for young entrepreneurs.

Host

Jai Goyal has joined us. Jai, with your background in finance and policy as a Columbia student, what do you believe are the most critical reforms needed to empower youth-led initiatives?

Jai Goyal

Thank you for the welcome. In my experience working with microfinance institutions, I've seen firsthand how strong policies can create space for underserved communities to thrive. For instance, providing small loans to young entrepreneurs can uplift not just the individuals, but also their families and the entire community.

The importance of thoughtful and well-positioned policies cannot be overstated. We need policies that encourage the growth of microfinance and other supportive financial mechanisms. Effective feedback loops between stakeholders can help ensure that programs are continuously evolving and improving. We don't need to start with perfection; we just need to start somewhere and refine the process over time.

Absolutely, the best approach is to start by identifying real problems faced by communities. Once these issues are recognized, we can create policies and programs that truly reflect the needs of the people. It's inspiring to see young entrepreneurs set up microfinance institutions in their communities to provide small loans.

Audience Member 1 (Ambassador, US Africa Youth Leadership Summit)

Young people today face significant challenges in finding jobs after graduation. The situation has become so competitive that graduates are increasingly turning to unconventional paths, like reality TV and social media influencing. How can we guide youth to utilize digital tools to expand their opportunities effectively?

Evie Chen

This is a crucial topic. Micro-influencers provide a unique avenue for young people to connect with specific audiences. Investing in these individuals can yield better results than traditional celebrity endorsements. Education is key. We need to teach young people how to navigate social media platforms and understand the algorithms that drive engagement.

Yuen Yen

Indeed, social media platforms can be powerful tools for young people to showcase their talents and promote their businesses. However, we must also ensure that these platforms foster positive engagement rather than risky behavior. Collaborative efforts between governments and social media companies are necessary to ensure that young voices are amplified while also being protected.

Host

Zainab, as a climate justice advocate, how can young leaders push for reforms that ensure marginalized voices are heard in global decision-making spaces?

Zainab

The most straightforward answer is empowerment. Empowering marginalized communities is essential to ensure their voices are heard. At Equal Right, we are working on mobilizing climate finance from the Global North to the Global South. One of our key initiatives is the cap-and-share model, which aims to cap carbon emissions and mobilize climate finance for energy transitions. If we implement cap and share effectively, we could potentially mobilize significant funds for climate justice, supporting initiatives that address extreme poverty and environmental degradation.

Audience Member 2 (Recycle My Battery nonprofit)

We've placed over 865 battery bins and educated over three million people about proper battery disposal. Currently, we're facing a challenge where we now need to pay for the battery bins. Can you guide us on how to bridge this financial gap?

Evie Chen

Your project is truly inspiring. Many universities and organizations have grant programs for initiatives like yours. Since you're already engaged with schools and communities, I recommend applying for these grants. Building trust with these institutions can secure funding and support.

Yuen Yen

Additionally, consider exploring partnerships with local businesses and organizations. They may be interested in sponsoring your bins or collaborating on educational initiatives. Finding creative revenue models can help sustain your organization's mission.

Host

Thank you all for your participation. Let's continue this important conversation beyond today and explore how we can work together to advance equitable finance and sustainable development.