NGOs and Aid Groups Can Look to Blockchain to Help Them
One of the key utilizations blockchain advocates point to when championing cryptocurrencies is a decentralized ledger’s ability to potentially integrate the masses of unbanked people on our planet. While it might sound like a utopian dream, some people just crave challenging feats. Currently, banks and other financial institutions are wary to give microloans, open locations, or offer services to people living in countries where financial institutions are weak and/or where corruption is high; the very tools required to determine the financial risks are inadequate to enable banks to offer services to people living in such areas.
For that reason, there are fewer people with bank accounts than with cell phones in the developing world. This has proved an issue for development groups, inhibiting avenues for providing funds securely and cost-effectively. Given that a phone call or even video chatting cannot secure a recipient’s identity micro-loans and/or donations. For that, across great distance especially, you need documentation, biometrics, and more.
Often times, people living in unbanked regions move around to find work. The remittance migrant workers send back to their families is often subject to heavy fees from institutions equipped to do so, and then again by currency exchanges. The recent coup in Zimbabwe saw bitcoin replace traditional remittance for many for the reasons already mentioned: unavailable or costly banking, and a great many cell phones.
Issues of global scale like international remittance — especially to refugee populations — and regional/national banking disparities are things that local national governments cannot or will not solve. The Rohingya, who have tragically been the victims of ethnic cleansing in Myanmar, have largely fled to Bangladesh, where they remain outside the scope a formal governmental and business solutions/aid.
This international tragedy and scandal is however being seen by some as an opportunity to test a new solution to a global issue. The plight of the Rohingya is great and not nearly enough is being done for them, but it is in such scenarios that NGOs and international aid groups step in to try and fill a gap. They are too often frustratingly without the tools needed to overcome the issues of identity verification, risk assessment (via credit history, asset and securities ownership, etc.), cost-effective means of money transference, and peripheral treatment and existence — such as statelessness — of intended recipients.
The team of LaLa World, a new blockchain startup, has begun distributing its kit (which includes a smartphone and unique QR codes which will help bring migrant workers travelling between Malaysia and Bangladesh (where an alpha case study is being conducted) into the LaLa Network. Through the LaLa World app users can transfer fiat currency as well as various cryptos, while also keeping a credit score for users through the blockchain LaLa is constructed on.
While LaLa World is offering the use of cryptocurrencies, and its own token of exchange, its predominant use of blockchain is to bring people verifiably into a decentralized network where key financially pertinent information can be stored, developed, and shared. With that innovation, the risk and cost of sending money via microloans (which LaLa is also in the business of providing users for things such as solar farm construction) will drop considerably. Furthermore, the need to pass through third party intermediaries is avoided to make proving who you are, and in a sense, what you are worth something that can be done anywhere at any time.
LaLa World’s team is aiming to address an increasingly borderless world with a technological and financial solution that will allow NGOs and other aid groups to use tools they are currently missing. Often times aid needs to pass through governments, which if they were working properly in the first place would not have such dire situations to alleviate. Scholars often cite the fungible nature of aid as a driver of poverty, instability, and human rights abuses. Now, with a p2p, blockchain verified ecosystem, organizations looking to help those in need across the world can do so without having to worry that their money will fall into the wrong hands.
This operation is already on the ground in Bangladesh and Malaysia, hoping to integrate the financially suppressed from becoming integrated into the formal global economy, and have access to credit, cheap payment methods, and a way to store money in lieu of a bank. LaLa’s goal is to have an operational model by February 2018, and is reaching out to potential partners to help expand LaLa’s potential impact.
Huge segments of the world’s developing population are currently without any access to banking. In many more ways they are outside the scope of NGOs that would seek to help them. The lack of formal banking and financial infrastructure leaves people vulnerable, and desperate, all of which fuels a vicious cycle of poverty. LaLa is hoping to help bring those people, living outside the states they reside in’s formal institutions into a global network that will act as a wallet for fiats and crypto alike, and make aid work more secure, and more fruitful. We can only hope that positive results come from LaLa World’s implementation in Bangladesh and Malaysia, as it would attract more aid organizations and NGOs to adopt the ecosystem. With the tools LaLa World is hoping to provide, roughly 2.4 billion people could find access to financial tools that could alleviate their standard of living and improve their security, financial and otherwise.
