Saving has been promoted as good practice to guard against immediate and future financial crisis and risks (Clancy, Grinstein-Weiss, & Schreiner, 2001; Curley, Ssewamala, and Han, 2010). Saving provides economic security and in the long run helps individuals to accumulate wealth and assets (Clancy et al, 2001). However, for low-income households and individuals, saving becomes extremely hard given that they face economic hardships and survive barely on minimum income and lack of resources (Clancy et al (2001). Such households are faced with a number of challenges which range from individual to institutional barriers which affect their saving outcomes and behaviors. Sherraden (2013) highlighted that, households and individuals in general still
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Developed by Michael Sherraden (Sherraden, 1991), the asset theory posits that, owning assets has “psychological, social, and economic benefits to individuals and families” (Curley, Ssewamala, & Han, 2010, p.2) and can help low-income households and individuals transition from the poverty cycle. Assets were categorized in form of “savings accounts, education scholarships, economic opportunities in form of income generating activities, owning a home” (Curley et al 2010, p. 2), skills, intellectual ability, (Grinstein-Weiss, Curley, & Charles, 2007), human talent, behaviors, connections and influence i.e. social capital (Sherraden, 2013) among …show more content…
The theory suggests that for people to be considered financially capable, they must possess the capabilities (knowledge and skills) and the opportunity to act i.e. access to institutions. In defining the building blocks of financial capability, Sherraden (2013), emphasize that financial literacy is the first block of financial capability. In this framework financial literacy empowers people with knowledge and skills which, make them better managers of their own finances and also help them make informed financial decisions, which improves people’s financial behavior. Using the asset and financial capability theoretical frameworks the study will test two
Developed by Michael Sherraden (Sherraden, 1991), the asset theory posits that, owning assets has “psychological, social, and economic benefits to individuals and families” (Curley, Ssewamala, & Han, 2010, p.2) and can help low-income households and individuals transition from the poverty cycle. Assets were categorized in form of “savings accounts, education scholarships, economic opportunities in form of income generating activities, owning a home” (Curley et al 2010, p. 2), skills, intellectual ability, (Grinstein-Weiss, Curley, & Charles, 2007), human talent, behaviors, connections and influence i.e. social capital (Sherraden, 2013) among …show more content…
The theory suggests that for people to be considered financially capable, they must possess the capabilities (knowledge and skills) and the opportunity to act i.e. access to institutions. In defining the building blocks of financial capability, Sherraden (2013), emphasize that financial literacy is the first block of financial capability. In this framework financial literacy empowers people with knowledge and skills which, make them better managers of their own finances and also help them make informed financial decisions, which improves people’s financial behavior. Using the asset and financial capability theoretical frameworks the study will test two