A recent World Economic Forum roundtable discussion reviewed how technology can help the UN reach its Sustainable Development Goals (SDGs). In particular, blockchain
— a new distributed platform — is uniquely positioned to accelerate the movement towards greater financial inclusiveness, solving hunger and poverty, and creating sustainable jobs. This is particularly important when one considers that:
- Of the ± 2.5 billion people in the world without formal banking, more than 1 billion are women who are excluded from participating in the local, national, international and digital economies because they don’t have access to capital or opportunities that are taken for granted in developed countries.
- Only one-third of the small and medium-sized enterprises (SMEs) in the world are run by women. Women business owners in developing countries face significant challenges — particularly in accessing finance.
- An estimated 70% of women-owned SMEs in the formal sector in emerging markets are underserved by financial institutions. This amounts to a financing gap of $285bn.
Entrepreneurship – Just a Few Clicks Away
The previous generation of entrepreneurs did not necessarily have the access
to financial or legal tools to secure funding or create legally sound contracts. Today, with blockchain-enabled applications like WeiFund, becoming an entrepreneur can literally be “just a few clicks away.”
Furthermore, the price of smartphones is projected to decrease over time. This means that people in developing countries, or people who lack access, can leapfrog desktop computers. Women and minorities also have a unique opportunity in blockchain to experience the same barriers to entry as any others approaching the technology. Smartphones provide a more practical and affordable internet and computer solution for many people. They also provide women with privacy and confidentiality which is an extremely important factor for women in gaining their independence as entrepreneurs in a patriarchal society.
Access to Third-party Services
The importance of ventures like Humaniq — a start-up designing a blockchain-fuelled mobile banking application that can create a network and financial infrastructure — cannot be over-emphasised. It will also provide third-party services integrated into the app: insurance, loans, data security, smart contracts and other features. In this way, Humaniq can offer empowerment to women as a ‘hand-up’ rather than a ‘hand-out’.
A diverse group of people are already taking the lead. For example, Fereshteh Fourough at Code to Inspire is teaching Afghan women how to code, including skills which are specific to blockchain. There are other powerful examples.
What will truly empower women significantly in Africa and other developing regions is access to banking and financial services
, small loans, insurance, document security and smart contracts which can all be made available through blockchain. Many overhead and administrative costs would be removed or reduced — there would be no manual processing or middlemen, less of a need for government or banks — making transactions affordable to the financially challenged.
That financial inclusiveness is already starting to improve with microfinance
. Evidence has demonstrated the power of offering micro-loans and other forms of financial support for burgeoning female entrepreneurs in developing communities. Blockchain-based funding applications will make these types of investments more widely accessible.
In many societies around the world, men still control female family members because they control the purse strings — severely impacting these women’s ability to act on business ideas or be entrepreneurs if their male family members disagree with them.
Mohammed Yunus, the father of microcredit and founder of Grameen Bank, however, focuses on small loans to poor women. He argues:
- women make better use of small loans than men;
- women have a better track record when it comes to repayment;
- women are a huge untapped labour pool;
- women have the right to access capital;
- women who receive loans adopt healthier lifestyles and are empowered.
Catheryne Nicholson, CEO of the blockchain application platform BlockCypher, says blockchain will be crucial in alleviating the socio-economic gap across the globe. She says: ”I believe that many of the world’s problems centring around education and poverty in developing countries could be solved with women in control of capital. However, the current financial system doesn’t provide access for almost three-quarters of the world’s population, most of whom are dirt poor and largely women. For the first time in history, blockchain technology can provide that access to anyone regardless of where they’re from. That’s why it’s so important for blockchain to thrive in developing countries.”
Innovation Matters to Development
The Global IFD specialist LSL World Initiative can assist governments to determine new sources of revenue and manage, leverage and protect these revenues. There are a whole range of potential revenue-creating opportunities that could be explored. For instance by creating a new concept of services or forms of public value, each blockchain transaction could be used by government as a means of revenue-raising for socio-economic development and gender equality. This is in itself a very exciting prospect for all governments—especially those of emerging countries.
Innovative Financing for Development (IFD) can work hand in hand with blockchain: micro-contributions in globalised sectors such as telecommunications and financial services, when aggregated, can provide significant revenue to finance blockchain projects, which could then, in turn, ‘feed’ IFD through the revenues generated on the various transactions.
With its open-source roots, blockchain is an inclusive technology creating a new technological arena in which there is the opportunity for emerging markets to make great strides in their economic development — leveraging technology — without the need for significant overhead investment in infrastructure.