Extent of Asset Accumulation of the Households

This paper examines the extent of asset accumulation and savings of households from the credit they obtain from community-oriented financial intermediaries (COFIs) and other financial sources in the Philippines. It also investigates how government can help poor households accumulate assets.

The study reveals that there is a clear difference between client households and non-client households in terms of asset ownership, access to credit, and the use of loans obtained. Findings include:

• Client households have greater asset accumulation, and obtain the benefits of greater asset accumulation than non-client households;
• Only client households allot a share of obtained credit to buy a real estate asset;
• Non-client households have higher allocation from credit obtained for the household’s regular needs, and for servicing another credit;
• Non-client households have lower allocation of credit for savings than client households;
• Non-client households’ use credit primarily for immediate needs and not for investing in asset accumulation;
• Attaining economic self-sufficiency, particularly for poor households, requires asset accumulation;
• Government policy should aim to alleviate asset poverty and not just income poverty in order to holistically combat all dimensions of poverty.