Asset Building
The Concept
Most people are familiar with the concept of an asset and typically think first of financial assets such as bank deposits, equity-stocks, or physical assets such land and animals, etc.This “balance sheet” application of the asset concept is important and relevant for poverty reduction. However, the development stakeholders take a more comprehensive view of assets, what they are, and how they can be mobilized to reduce poverty and injustice. We see assets as a broad array of resources that enable people and communities to exert control over their lives and to participate in their societies in meaningful and effective ways.
Any Asset Building Programme in the context of poverty reduction should help in building the enduring resources-assets-that individuals, organisations, or communities can acquire, develop, improve, or transfer across generations. These include
- Financial holdings of low-income people, such as savings, home ownership, and equity in a business; and philanthropic capital, which is composed of financial resources.
- Natural resources, such as forests, wildlife, land, and livestock that can provide communities with sustainable livelihoods and that are often of significant cultural value; and environmental services, such as a forest’s role in the cleansing, recycling and renewal of the air and water that sustain human life.
- Social bonds and community relations that comprise the social capital and civic culture of a place that can remove the isolation of the poor.
- Human assets such as the marketable skills that allow low income people to obtain and retain employment that pays living wages; and comprehensive reproductive health, which affects people’s capacity to work, overcome poverty, and lead satisfying lives.
The Power of Assets
Assets are not simply resources that people use in building livelihoods: they give them the capability to be and act
Control over assets gives low-income people the independence necessary to resist oppression, pursue productive livelihoods, and confront injustice. Even when they own few tangible goods or financial resources, individuals possess intrinsic resources such as intelligence, creativity, diligence, and inner strength. Groups of people also share common resources, such as community-based organisation, and cultural values and practices. These strengths and attributes have been called “asset” by proponents of people-centred and community-based development.
The concept of building upon people’s existing assets and see these capacities as a starting point in the development process. It is important to help low-income people develop additional assets that will enable them to be productive participation in economic and social life. As Michael Sherraden writes in Assets and the Poor. “People think and behave differently when they are accumulating assets, and the world responds to them differently as well”.
The power of assets is found in the familiar adage about the distinction between giving someone a fish and teaching him or her to fish. If we give a man a fish, it will satisfy his hunger today. But we will need to continue providing fish for him to survive. So we teach him to fish.This is what is called skill building and there is no gainsaying the fact that skill is an important asset although it is intangible.
Asset building in many distinct cultural and national context is attempted using a variety of methods that suit local circumstances.
Some examples of asset building strategies pursued in different cultural contexts worldwide include micro-enterprise and small business development, which can help low-income people to build equity in businesses. In several African and Latin American countries, the knowledge of traditional healers is drawn upon as a way to protect and secure individual and community reproductive health.
Elsewhere, young people‘s commitment to assuming individual and collective responsibility, which are needed for social capital and civic culture to take root. In another example, cultural values and practices guide some of the most effective efforts to support sustainable management of forest assets in Africa, Asia, Latin America, and the United States.
The asset building perspective has proven flexible and broad enough to capture imaginations, encourage collaborations, and mobilize resources in a wide range of culture settings.
The power of microfinance
The microfinance has a tremendous potential to advance the asset building programme for the benefit of the poor provided they are properly designed and deployed keeping in view the locations specific requirement which include the context of micro environment as well as the clients. It is important that microfinance practitioners should focus their microfinance programmes towards meeting this objective. For, sans this focus, microfinance would not be seen as a development finance to address poverty. It will be reduced to a mere finance to generate money and capital.
Thus, microfinance gets a meaning when it works for building the assets of poor to address their vulnerability and reduce poverty. The meaningful microfinance is one, which seeks to accumulate productive assets for the poor.
