Asset Building and IDAs

As a matched savings account, MCSP and other individual development account programs support individuals and their families in asset-building through monthly savings, goal setting and financial education. Traditional asset goals include homeownership, microenterprise development and post-secondary education.

This concept of building assets to combat poverty is relatively new. Professor Michael Sherraden at the Washington University in St. Louis’ Center for Social Development introduced the idea that the cycle of poverty cannot be broken through an increase in income alone. Rather, he identified assets as a key piece to financial independence and self-sufficiency.

Since Sherraden’s seminal book, Assets and the Poor, was published in 1991, the asset-building movement in the United States has grown to reach the far corners of the country. From 1997 to 2002, the American Dream Demonstration showed that not only can people of low-incomes save, but they can build wealth through assets. In 1998, Congress enacted the Assets for Independence Act, that continues to support asset building across the country, including the Matched College Savings Program Initiative.