FILE – Women from a local cocoa farmers association lift a sack in a cocoa warehouse in Djangobo, Ivory Coast, Nov. 17, 2014. (Reuters)
Blockchain, the technology underlying digital currency Bitcoin, is making it easier for Sub-Saharan African women farmers to establish their economic credentials and negotiate gender bias.
If you are a woman farmer in Sub-Saharan Africa and you go to a bank to borrow, you have to bring like seven pieces of paper, you might have to bring your uncle or brother or husband, and you still don’t get treated equally because they’re not trusting your data directly – Ashish Gadnis
When Ashish Gadnis, CEO of the financial tech company BanQu (pronounced “bank you”), was in the Democratic Republic of Congo in 2014, one of the women farmers he worked with made a little money on her harvest and wanted to open a bank account. She couldn’t because of what Gadnis described as “dinosaur laws that [require] a male co-signing” for her.
“They were willing to help me open a bank account,” he said in an interview. “That’s where the name [of his company] comes from because the guys kept saying ‘we can’t bank her, but we can bank you’ … because she was a woman. And she had a piece of land, … she had microfinance, but she “was not recognized as a valid person to have an economic profile.”
That is one of the biggest problems for women in Sub-Sahara, said Gadnis. According to a 2014 report by the World Bank and the ONE Campaign, women account for nearly half of the agricultural workforce in the region, but “they tend to be locked out of land ownership, access to credit and productive farm inputs like fertilizers, pesticides and farming tools, support from extension services, and access to markets and other factors essential to their productivity.”
They are left behind, stressed Gadnis, because “they don’t have an identity … at an economic level that establishes their land rights, their harvest information, their microfinance loans, their mobile phone usage and things like that.”
To address the problem, BanQu uses blockchain to establish economic identities and proofs of record for people in extreme poverty zones.
Blockchain is a decentralized, trust-based ledger that lets all concerned parties verify their transactions by consensus. Instead of keeping multiple, separate balance sheets, all parties to a transaction can enter the record into a “block.” Once it is verified by consensus, it’s added to the “chain” and cannot be altered.
“The value of it is that you don’t have to rely on a central authority to validate anything that is stored on the blockchain,” said Joshua Forman of Colorado-based Forman Consulting, which focuses on the adoption and expansion of technology products in organizations
According to Gadnis, women farmers, migrant workers, and refugees who get aid from the United Nations or international non-governmental organizations, such as training and microfinancing, often don’t have access to that information.
“When the programs of these INGOs or social enterprises end, the woman farmer or the refugee does not have anything that they can basically collect in terms of their work history, their economic profile,” he said. “…That mother farmer – her data today is sitting in the microfinancing institutions database, the UN database, some INGO’s database, and she doesn’t have anything.”
With a blockchain profile that establishes ownership, business assets, and production values, the farmer can access her records using a mobile phone to present “proof of identity” or ask her bank to do so. That “is extremely empowering in Sub-Saharan Africa,” said Gadnis, because it opens up access to finance, gender equality and various other opportunities for women and minorities.
“I saw this many, many times last year in Sub-Saharan Africa – women get a lower price on their grain because [they] are not visible on the supply chain,” he said. “Because the blockchain is a distributed trust network, the woman farmer now has equal rights because nobody can say that she doesn’t exist.”
The approach could also improve microfinancing terms for women, once they are more visible on the supply chain.
“Microfinance, while [it] has been good, it continues to be expensive,” Gadnis said. “… If I am a coffee buyer and I exactly knew who the farmers were in the trust network and what was their land, what was the rainfall, I can easily reduce the cost of borrowing. In fact, I can also use crop insurance at a lower cost because in a trust consensus network, I know that this is your land.”
While acknowledging that blockchain can peel away a layer of gender bias as it removes intermediaries from the equation, Forman said implementing it can be tricky and time-consuming because all parties to a transaction have to agree that the blockchain ledger is the source of record.
These records, such as land ownership deeds, typically are controlled by governments. “You’ll have to get through the bureaucracy to be able to make that the way that it’s done,” he said.
“The government first has to acknowledge that that will be the source and everybody who is going to buy, sell, lease land, is also going to have to agree that this is where the information will be stored,” he explained. “… So that’s a public policy and just a general social consensus that needs to occur.”
But once these challenges are met, Forman said the blockchain ledger, which cannot be falsified, will benefit landowners by cutting back on corruption and bureaucracy, and improving production and economic input.
For Gadnis, there is also a humanitarian value to blockchain that should be acknowledged. He said while only a handful of companies, including BanQu, are applying blockchain to developing countries, the technology can empower people in poverty and refugee zones by putting key parts of their information in their hands.
