Use Case 2: Inclusion of undocumented & underbanked population.
Depending on the type of estimation, more that one to two billion people worldwide are unable to prove their identity to the satisfaction of authorities and other organizations — often excluding them from property ownership, free movement, and social protection as a result. Additionally, A Lack of identity prevents credits, loans and thus prevents entrepreneurship.
Lack of Identification and Documentation
Millions of refugees trying to relocate around the world can’t be identified, a disproportionate amount of them being women and girls, who struggle to obtain IDs, often the result of barriers related to: freedom of travel, distance, financial costs, time constraints, illiteracy, lack of information and awareness, and lack of support from family members. Blockchain can allow for complementary decentralized and self sovereign identity solutions.
Access to Banking
While the number of unbanked individuals is decreasing, there are still 2 billion people on the planet without access to traditional banking services. These underbanked people have to rely on alternative financial services like payday loans, pawnbrokers, and loan sharks, that are often highly unregulated and can be exploitative and even downright criminal. Blockchain with it’s peer-to-peer nature removes the need for verification from costly intermediaries such as banks or other institutions.
The World Food Programm (WFP) is trialling blockchain as a means of making cash transfers to the underbanked more efficient, transparent and secure, through vouchers or pre-paid debit cards, allow people to purchase their own food locally and are an effective way to empower them to make their own purchasing decisions to relieve hunger. Cash transfers are an increasingly important means of providing assistance for example to refugee camps. The WFP therefore aims to reduce payment costs associated with cash transfers, better protect beneficiary data, control financial risks, and set up assistance operations more rapidly in the wake of emergencies.