What is asset development and how can it help low-income rural families?
Asset development, in the form of Individual Development Accounts (IDAs), is a method for helping low-income families develop savings. Money saved in an IDA can be used to make a downpayment on a home, start a business, or pursue educational opportunities. In rural areas, participants are often allowed to use IDA funds to purchase a car or make home repairs. IDA programs are run by nonprofit organizations that match the contributions by the saver with additional funds. In addition to limits on how the money can be spent, IDA programs require financial literacy training. Some states include IDAs in their welfare programs. Rural IDA programs may benefit from the trust participants have for their local bank and from the willingness of local businesses to support these programs. However, lack of transportation to attend financial literacy training and limited access to funding can make it more difficult to implement IDA programs in rural communities. For more information about IDA programs
Asset development, in the form of Individual Development Accounts (IDAs), is a method for helping low-income families develop savings. Money saved in an IDA can be used to make a downpayment on a home, start a business, or pursue educational opportunities. In rural areas, participants are often allowed to use IDA funds to purchase a car or make home repairs. IDA programs are run by nonprofit organizations that match the contributions by the saver with additional funds. In addition to limits on how the money can be spent, IDA programs require financial literacy training. Some states include IDAs in their welfare programs. Rural IDA programs may benefit from the trust participants have for their local bank and from the willingness of local businesses to support these programs. However, lack of transportation to attend financial literacy training and limited access to funding can make it more difficult to implement IDA programs in rural communities.
