Livelihoods assets

People and their access to assets are at the heart of livelihoods approaches. In the original DFID framework, 5 categories of assets or capitals are identified, although subsequent adaptations have added others, such as political capital (power and capacity to influence decisions). The original 5 categories are:

• human capital: skills, knowledge, health and ability to work
• social capital: social resources, including informal networks, membership of formalised groups and relationships of trust that facilitate co-operation
• natural capital: natural resources such as land, soil, water, forests and fisheries
• physical capital: basic infrastructure, such as roads, water & sanitation, schools, ICT; and producer goods, including tools and equipment
• financial capital: financial resources including savings, credit, and income from employment, trade and remittances

Assets can be destroyed or created as a result of the trends, shocks and seasonal changes in the vulnerability context within which people live. Policies, institutions and processes can have a great influence on access to assets - creating them, determining access, and influencing rates of asset accumulation. Those with more assets are more likely to have greater livelihood options with which to pursue their goals and reduce poverty.