The Northern States of Malaysia comprises of four states (Penang, Kedah, Perlis and Perak) still record high poverty incidence eventhough Malaysia has experienced a remarkable reduction of poverty over the past century. Economic activities in Perlis and Kedah that are predominantly agriculture in the rural area contribute to this disparity. To add, rural households are also subject to risks and uncertainties that make them more vulnerable to poverty. This study examines the impact of risks and assets on households’ vulnerability to poverty. A survey of 400 respondents was conducted in December 2015 in the northern region of Malaysia. From these 400 questionnaires, only 298 were considered valid and used in the analysis. Using a logistic probability function, the results indicated that risks are not a significant threat to households. Gender and strata are crucial elements that significantly determine households’ vulnerability. While human capital and financial capital significantly reduce households’ vulnerability to poverty, physical and natural capitals were not statistically significant. The study suggests that the government and practitioners design strategies and policies with an assets-based approach. The asset-based approach is more appropriate for linking the causes of poverty to vulnerability.

1. Introduction
 2. Literature Review
  2.1. Risk Vulnerability to Poverty
  2.2. Assets Vulnerability to Poverty
  2.3. Conceptual Framework
 3. Methodology
  3.1. Data Population, Sampling andAdministration of the Questionnaire
  3.2. Ethical Considerations
  3.3. Pilot Study
  3.4. Reliability of the Questionnaire
  3.5. Validity of the Questionnaire
  3.6. Variable Measurement
   3.6.1. Vulnerability to Poverty
   3.6.2. Assets
   3.6.3. Risks and Shocks5
 4. Analysis and Discussion
 5. Conclusion and Policy Implications
 6. Limitation and Suggestions for FutureResearch
 References

• Abdelhak Senadjki(Faculty of Business and Finance, Universiti Tunku Abdul Rahman, Malaysia.) Corresponding Author
• Saidatulakmal Mohd(School of Social Sciences, Universiti Sains Malaysia, Malaysia.)
• Zakaria Bahari(Centre for Islamic Development Management, Universiti Sains Malaysia, Malaysia.)
• Abdul Fatah Che Hamat(Centre for Islamic Development Management & School of Social Sciences, Universiti Sains Malaysia, Malaysia.)