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A Framework of Asset-Accumulation Stages and Strategies
Schreiner, M., Beverly, S. & Moore, A.
Publication Date: 2001
Published by: Microfinance.com
Document Type: Paper
How do people go about accumulating savings?
In this paper the authors propose that asset accumulation occurs in three stages:- in the first stage (reallocation), current resource inflows must exceed current outflows. To do this, people reallocate resources from current consumption or leisure or from future consumption or leisure
- in the second stage (conversion), people may convert resources from liquid to illiquid forms
- in the third stage (maintenance), people resist temptations to dissave
The authors theorise that people adopt psychological and behavioral strategies to achieve each of these objectives. Putting psychological and behavioral strategies together with the stages of reallocation, conversion, and maintenance results in six strategy groups. The paper provides examples of each strategy group and discusses implications for encouraging account ownership among the unbanked, improving asset accumulation programmes, and improving financial-education curricula.
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