Since 1989, Sri Lanka’s Hatton National Bank (HNB) has run two programmes called “Linking Children and Youth to the Bank”, and “Linking Rural and Poor to the Bank”. In the youth programme, the branch managers of HNB’s 180 branches each “adopt” up to three schools in order to pass on financial education and to form an attachment to communities.

Under the project, the bank branches set up mini student banks at the schools and train five students as leaders in each school. The bank organizes competitions that focus on saving and banking, as well as other skills such as art, music and drama. The bank organizes conferences for student bank managers and trains them to implement financial education in their schools, teaching them in particular to have good saving habits.

The bank has introduced a savings account for minors, and whenever the bank went to rural areas to open a new branch it found that schools in the cities and towns were the most important meeting places for young people. Reaching out to schools created goodwill among the children and helped link young people to banking for the future of the country and the banking system.

HNB felt that it had a social mission to lead young people from the place where they gather, the school, to inculcate a savings culture. As the bank focused on building deposits as part of its regular business strategy, it looked at children to help it build relationships with schools. In Sri Lanka in 1979 and 1989 there were youth uprisings, so the bank felt it was important to create a stronger connection to Sri Lankan society by building relationships with young Sri Lankans. By founding a social initiative to explain about savings, credit products, and how banks work, the bank has worked to help de-mystify finance.

From 1998 to 2008, the programme trained 15,000 students as student managers. The bank maintains 200 student branches, which are linked to its 180 branches. HNB has established a savings deposit relationship with 500,000 students, which raised Rs5 billion (US$41.6 million).

Every time the bank opens a new branch, it will form a relationship with two or three schools. The bank selects five students to manage a student bank, changing managers every year. Over the past 20 years, the bank has in this way trained 25,000 children to be managers.

The bank has a recruitment programme to enlist 300-400 people to become banking assistants. The banking assistant programme has many social benefits, and some of the student managers have formed HNB Student Managers Club to plan social events and career development programmes, under the patronage of the bank.

The bank makes sure to teach the children about the importance of prudent spending and saving.

There is an island-wide student conference to gather 400 student managers, and in the morning session they discuss the different topics, and in the afternoon session key speakers talk about leadership, business development, and technology. During the year, there are 10 regional conferences to update developments.

In branches, students are educated on savings and how the bank is run. In respective branches, there are lessons on treasury, credit, guarantees, leasing, credit cards, and other skills. There are also ongoing programmes for commerce, as well as financial lessons about basic credit products, letters of credit, guarantees, foreign exchange and savings.

Although private schools have been open to the bank’s programmes, government schools initially showed reluctance to take part because of the conflict of interest of having a bank in the school grounds, and all of the permissions that this activity would require. If the bank goes to a particular area to open a branch, it needs to convince the school principals to take part, but even if they do so, there is still the next step, which is to get approvals from the Ministry of Education. In 2003, the bank went directly to the Ministry of Education and told them that the bank will run a programme with them to enhance creative projects for the kids in the school and the bank will sponsor it island-wide, and has done so every year since 2003. The bank spends Rs30 million (US$250,000) a year on this programme and in 2008, around 200,000 kids took part in this initiative. As a result of that, they have built a very strong relationship with the Ministry of Education. Since starting this programme, the time for new approvals has become shorter.

The bank wants to encourage the children to save money themselves. Parents are the ones who save for their children, but the bank wants children to understand saving for themselves. It wants student managers themselves to communicate to their classmates, so the bank wants to motivate them and give them the responsibility of winning customers over. The bank runs a competition among student managers every quarter of the year and selects the student manager team that helped to build the best relationship with the bank.

There are two main expenditures. The bank has, as part of its corporate social responsibility (CSR) programme, opened 150 libraries in rural areas. The bank runs this programme with the Ministry of Education within its CSR budget.

The bank manages the other expenditures from its marketing budget. This money is diverted to the student branches. Every year the bank spends close to Rs10-12 million. (US$83,000-$100,000) on this.

For more info:
http://www.financialeducationsummit.org/presentations/Chandula_Abeywickrema.pdf
http://www.hnb.net/youth_overview.asp
http://www.hnb.net/csr1.asp