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Prof Muhammad Yunus also recipient of the US Presidential Medal of Freedom and the Congressional Gold Medal

Frontier technologies and empowerment finance

“Never before have we seen such a technology as transformational as blockchain — whether its being used to send immediate foreign aid via crypto, or to generate IDs for refugees — it has the power to change the way the developing parts of the world work while enabling more developed nations to efficiently share resources. The United Nations focuses largely on taking a decentralized perspective to the way the world works — and to adopt blockchain technology across systems would serve the best match.” – Janet C. Salazar, permanent representative to the United Nations.

To turn the tide on global poverty, women need to win investment and hold the purse strings. That’s the conclusion of hard data and lived experience, which shows time and again that women in developing economies are overwhelmingly more likely to invest capital into their community and family wellbeing, create sustainable businesses, and return loans without default. This creates a virtuous cycle: children in families receiving investment are more likely to stay in school and receive healthcare, reaping generational benefits.

For several years, the answer has been microfinance. Brain child of Muhammad Yunus, who received the Nobel Peace prize in 2006 for his work, microfinance empowers the poorest communities on earth with small but significant loans. These loans may come from an external investor, or from within the communities themselves. To ensure our charity Build Africa developed a sustainable education solution in Uganda, we worked with the local community to help them establish Village Savings and Loans Associations, building a small pot of funds – managed by the female gatekeepers – to provide the financial safety-nets and entrepreneurial capital that would make long-term education of their children a feasible and attractive solution. The charity has now helped create 3000 VSLAs.

For the two billion adults and 800 million young people who remain ‘unbanked’, without access to even the most basic financial services, this capital is transformational. For women – without assets to barter or permission to earn – it’s life-changing. Scaled up, it’s a global game changer. Just a 15% increase in the proportion of women accessing microfinance could reduce gender equality by half in the average developing nation (Gender Inequality Index). 

But huge challenges remain, and they go well beyond sub-Saharan Africa. Availability of finance doesn’t automatically empower women, who still battle cultural norms that keep them bound to hard domestic labour, subsistence farming, water carrying and child rearing. And new crises of dislocation are emerging.  Millions of displaced women, forced to flee home without documentation or access to bank accounts, remain deeply vulnerable to exploitation even when they reach safety.

Enter blockchain: the ‘frontier technology’ revolutionising empowerment finance and blazing a trail through even the dustiest institutional mindsets. As a ‘distributed database of immutable digital records that can be accessed from anywhere’, blockchain allows users to build and maintain permanent, secure records and directly transfer digital assets – empowering women to verify identity, prove asset ownership, and receive deposits transferred directly into their hands. As climate-related migration accelerates in coming years, these attributes hold huge promise for a world on the move.

To tackle lower rates of female digital literacy, innovative partnerships are springing up to. A venture between UN Women and the World Food Programme could soon see ‘a Syrian woman scan her eye to request cash back at WFP-contracted supermarkets. This will link to her account on the blockchain, and the amount of the cash distribution is automatically sent to Building Blocks. The fact that UN Women and WFP validate each other’s transaction through a common blockchain network, results in improved security and accountability. There are also opportunities for cost and risk reduction, as well as increased harmonization of aid efforts.’