Asset-building and microfinance: An econometric analysis

Abstract

The poor's central resources for livelihoods enhancement are their assets. This emphasizes the need for asset strengthening and accumulation to achieve social transformation and poverty reduction. Poor people rarely speak of income but the management of assets in the form of physical, human, social and environmental as a way to cope with their vulnerability. This paper attempts to carry out an econometric analysis of the how asset-building can be enhanced by the provision of microfinance. The poor have lower assets thus they are disadvantaged by financial exclusion. Results show a statistically positive relationship between microfinance and assets.