Assets Matter to Poor People

In the wake of advances in technology and business model, an increasing number of poor households are gaining access to financing for physical assets ranging from smartphones to solar panels. However, even as poor people increase their borrowing for these assets, their impact on people’s livelihoods—and how debt affects the benefits of asset ownership—remains poorly understood.

CGAP has undertaken a comprehensive review of the available evidence to understand (i) how asset ownership can lead to improvements in well-being for poor households and (ii) whether obtaining an asset through a loan or lease as opposed to a transfer, grant, or outright purchase affects the benefits associated with ownership.

This review focuses on recent evidence on physical assets like household appliances, livestock, machinery, and mobile phones, but does not include land. It also excludes financial assets like savings and intangible assets like social networks. The term “financing” is broadly used to include credit and leasing.