Paper presented at the 'Financial Literacy, Banking and Identity Conference', Melbourne, 2006
This paper describes Amartya Sen’s 'Development as Freedom' framework and the work of Michael Sherraden on asset-building policies. It states that they provide valuable perspectives for the emerging microfinance sector in Australia. The paper also discusses examples of microfinance initiatives currently active in the country.
Amartya Sen’s framework of viewing development as freedom reinforces the need to achieve poverty alleviation through enhancing people’s freedom and choices. Microfinance in Australia is showing promise as an effective vehicle to do this. Sherraden’s work on asset accumulation is an extension on Sen’s framework. Asset accumulation plays an important role in the development of freedom. The implementation of asset-building social policies in Australia would help to reduce intergenerational poverty by allowing everyone to have a chance to accumulate assets.
Microfinance initiatives currently operating in Australia are effective in improving levels of financial capabilities of low-income people, because they provide greater freedom and informed choices. In conjunction with experimentation, the paper suggests that organizations remain connected with the purpose of development for poverty alleviation in Australia.