Impacts of An Asset Building Intervention On Household Well-Being in Rural Uganda

Background and Purpose: Asset development is a key strategy to promote economic and social development in Sub-Saharan Africa (SSA). Research has found associations between asset ownership and household well-being. Although developmental agencies and researchers have become increasingly aware of the potential role that assets play in enhancing well-being among individuals, households, and communities in developing countries, there has been little rigorous research on impacts of asset-building interventions for families in SSA. In this study, we analyze wealth and perceived household economic stability of a matched savings intervention among rural households in Masindi, Uganda.

Methods: This study uses data from a quasi-experimental pilot project in Uganda that is part of the AssetsAfrica program a demonstration and research initiative designed to test asset building initiatives in Africa. The asset building project is modeled after matched savings programs in the United States. However, it has several unique features tailored to meet cultural and circumstantial conditions in Uganda. Two hundred people were selected to the treatment group and 200 to the comparison group. In this study, we examine whether participating in an asset building intervention leads to higher perceived household economic stability and more wealth among households. After controlling for possible selection bias using Propensity Score Matching, perceived household economic stability and wealth is tested using Difference-in-Differences.

Results: Results suggest that participating in the asset intervention has a statistically significant positive effect on the treatment group's perceived household economic stability and wealth. Using propensity score matching and difference-in-differences, significant differences are found on the adjusted means for financial assets ($1,323.01) and perceived household economic stability (0.52).

Conclusions and Implications: Given the economic and social context of SSA, it is particularly challenging for poor households to gain economic stability. Households engage in innovative and often less-than-successful strategies for acquiring economic stability due to limited access to formal financial instruments and tools. The asset-building intervention in this study has included incentives and structures for saving, financial education, peer support, and asset-specific training. This intervention addressed some of the crucial concerns that have been discussed in savings research concerning barriers to savings for poor people. While more research is needed, asset interventions show promise of having a positive impact on perceived household economic stability and wealth for rural poor households in Uganda. Overall, results of this study show that asset-building interventions have potential utility as a policy solution for improving the economic well-being of poor households in SSA. Policies that create asset interventions may be an important component of a social development strategy for developing countries such as Uganda.