Improving and extending access to social protection through a digital and self-administered information system
Flexible, shock-responsive social protection systems require strong administrative capacities and up-to-date information on vulnerable groups for the effective and timely delivery of support. Unfortunately, administrative capacities are often limited in low-income countries. As a consequence, available information on vulnerable groups is often insufficient or outdated. This lack of information on those in need may deprive people of social protection and access to critical services. It is in particular those most in need – undocumented informal workers, women, children and elderly in distant rural areas – that, when lacking access to critical services, suffer the most.
This project seeks to address administrative difficulties in delivering effective, shock-responsive social protection. Based on cutting-edge blockchain technology, it seeks to pilot a digital and self-administered information system. A digital, self-administered information system helps to improve the targeting of beneficiaries and accelerating the disbursement process when it comes to payouts. It allows the delivery of much-needed cash to beneficiaries with greater speed, precision and flexibility – even in challenging environments. By enhancing effectiveness and allowing to extending financial protection to underserved vulnerable communities, the project aims to contribute to promoting financial inclusion and closing the gender gap when it comes to social protection.
What actions do you propose?
The overall aim of the project is to improve the targeting of disaster-related financial benefits to poor and vulnerable people. To that end it pilots a digital and self-administered information system based on blockchain technology.
A key problem to develop or scale up shock-responsive social protection systems in low-income countries is inadequate or outdated information on vulnerable people. Collecting information on vulnerable groups and keeping it up-to-date is a time and resource-consuming process. It requires substantial human and financial resources – resources that low-income countries in the Sahel or Sub-Sahara Africa typically lack. As a result, available information on vulnerable people is often insufficient. Adequate information on vulnerable groups is, however, a critical perquisite to allow for effective and scalable – that is shock-responsive and insurance payouts backed – social protection programs. In post-disaster situations administrations are typically absorbed with coordinating the number of actors involved in disaster response. Administrating or expanding social protection beyond existing programs can be complicated. There is no time verify and identify new beneficiaries. The lack of identification deprives vulnerable people of protection and access to critical services. As a consequence, they are underserved.
This project seeks to address the capacity problems associated with collection and updating of information on vulnerable population. Its goal is to use modern IT-technologies, including blockchain, to set up a digital and self-administered information system on vulnerable population.
This digital information system would capture key social, economic and physical factors that determine individual vulnerabilities. Core elements would be more ‘fixed’ personal and relational data (e.g. name, date of birth, address, mobile phone number, sex, education, religion/ethnicity, name of mother/father; husband/wife; children) and more variable economic data (e.g. income, crops planted/livestock owned) to account for one’s shifting vulnerabilities. The information would be saved digitally and decentralised on a secure blockchain script. This would secure extremely high data protection standards and prevent public authorities and others to change or manipulate the information given without detection. People would remain in full control of the data. The important point is that this digital information system would be self-administered. This means that it would be created and managed by the people themselves. All information would be collected by the people and verified by an individual’s peers (e.g. friends and family members, village councils) or other trusted service providers (e.g. cooperatives, mobile operators) to become valid. People would decide who they want nominate and thus be in full control with whom they want to share the sensitive information.
The digital self-management also contributes to ensure that the information system remains up-to-date. Paper-based verification processes are often a time- and resource-consuming process and a burden, especially for rural people who have to travel miles to the next public branch to change information. A digital and self-administered information system reduces the hurdles and removes the need for travel.
If approved for sharing, the information given can then be used by the state, NGOs and other actors such as insurance companies to better targeting aid and services. It would allow them to support specific groups such as, for instance, poor women. The data provided would allow them to make disaster-related insurance payouts to poor rural women living in Area A, B and C. In other words, it would faciliate a gender-sensitive insurance program. Such targeted relief support would not only strengthen effectiveness but enhance the visibility of state and international action and, in doing so, contribute to strengthening their legitimacy. State (and other actors) should have in interested in demonstrating that they deliver. Apart from relief management, the information provided could also be used to improve disaster risk reduction. The mobile phone number, for instance, could be used to send out targeted early warnings and, thus, contribute to prevent the worst from happening.
Technically speaking, the project would be based and combine modern blockchain technology with other established IT-technologies. Individuals do not need to know blockchain technology to manage personal data nor do they require large-scale broadband internet. What they need is a simple mobile device or, alternatively, access to a computer with a simple internet connection. People could insert or update their personal information through a USSD-menu of a simple mobile device, a smartphone application or website. Nominated peers or service providers would then receive a notification (e.g. a SMS, email) to confirm the information provided. Friends and family member could verify personal and/or relational data (e.g. name, family ties, education level); as a lot of small-holder farmers are organized in agricultural cooperatives, from which they buy and to whom they sell products, agricultural cooperatives could verify economic data (e.g. crop/livestock, income); mobile operators, in turn, could be well-placed to verify the details usually to be found on a legal identity card (e.g. name, sex, address) due to the customer details they hold.
Although it is technically feasible, developing a digital and self-administered information system on vulnerable population is still a complex endeavour that requires profound insights into local conditions and capacities and strong support from the public and private sector. The purpose of the pilot is therefore to elaborate a tailor-made solution through a participatory design process that allows for a limited field-trail. Accordingly, the pilot will be divided into four distinct phases:
Phase (1): Develop a Use-Case
The first phase provides the opportunity to specify the project goal and develop a “user-centric” solution - a solution that meets the needs on the ground. This requires a profound understanding of local conditions and capacities. During this first stage adequate public and private stakeholders will be identified and technical requirements will be explored. Goal is to develop a use case where and how the project will be realized. The phase involves amongst other, a political, technical and site assessment of the viability of the project. Input and support from the private sector and technical experts regarding technical implementation will thereby be indispensable.
Phase (2): Proof-of-Concept
In the second stage, a proof-of-concept will be developed. Purpose is to review collected insights and develop a detailed ‘technology plan’ that captures the different components (including technical issues and solutions) and that reviews and assess various design choices. Once a proof-of-concept has been successfully developed a prototype of the digital information system will be developed for limited field trial.
Phase (3): Field-trial
The third stage would be a limited roll-out in a specific area (e.g. number of villages). Purpose is the execution of activities that allow to verifying or refining components of the digital information system. They could involve, for instance, a test of the community approach verification, or the insertion, integration or change of data points.
Phase (4): Review/Upscaling
The last phase would be an evaluation of the pilot. Purpose is to review findings and collect lessons learned. Should the field-trail be successful it may also involve a plan how the scale the project and and subsequent activities to apply for climate funds.
A participatory design approach to ensure feasibility
The successful implementation of the pilot is only possible with strong local ownership, that is, the active contribution from public stakeholders and effective community participation. That means, from the very beginning on local political actors and communities must be actively involved in the development of the project and its decision-making process. Moreover, the proposed design elements must also be responsive to local demands/innovations (including community village demands). This requires effective communication channels, regular feedback loops and flexible project structure.
To ensure feasibility, the project will first sensitize representatives from the respective line ministries of the potential benefits of the project and seek feedback. Goal is to develop a common plan where and how the project could be implemented and anchor the project in local policy processes. Backed by a political buy-in the project will then seek further support and input from the private sector to work out local technical requirements. In collaboration with (sub)national authorities suitable and interested village communities would then be identified for a limited field trail. The goal of this site assessment would be to establish effective communication channels, visit the communities, present the project, get another round of feedback on its various design elements (including on the community approach for information verification) to make sure its speaks to local capacities and needs. The next steps would be to revise the project elements and review the communities’ availability to implement the project. Overall, the project works only when there is active community involvement. When there is sufficient positive resonance to participate in the project, the project will be implemented according to the work plan. The implementation will be accompanied by trainings or workshops. if necessary, to transfer the necessary skills to secure a successful implementation. As the project is envisioned a highly collaborative undertaking, the development and implementation of the project must live up to the highest standards of transparency to secure trust among stakeholders.
Who will take these actions?
The conceptual work will be done in close collaboration with the interested countries and supporting (sub-)national authorities, including village communities. Key activities of (sub-)national authorities activities would involve to
- review and endorse the proposed project
- discuss proposed working plan, provide technical advice how to realize the project
- help to make arrangements with private stakeholders
- help to identify suitable village communities
- help establish communication channel to village communities and mobilize them to participate
- support coordination witth various ministries to ensure that there is consistency with sector policies
Key activities of the InsuResilience and A2R involve facilitating activities (establishing contacts with country experts/technical experts such GIZ Blockchain lab/public authorities/liason with private sector representatives) and advisory services (feedback, advice, monitoring and mentoring, trainings).
The actual technical work – the software development – will be done by IT-specialist. The expertise is likely to be found in the private sector. There are a number of specialized private start-ups working on blockchain solutions which have the necessary expertise and/or developed prototypical applications that might be contacted for the development of a self-administered information system on vulnerable population (e.g. Gravity, BanQu and Accenture). But also traditional humanitarian or development actors such as FAO and KfW, have relevant expertise and may play the leading role in the development a blockchain solution. FAO, for example, developed successfully a blockchain-related application named “Building Blocks” to leverage cash transfer to Syrian refugees;KfW developed “TrueBudget”, an application to trace budget processes. Hence, there might be a possibility to draw on existing (public) blockchain solutions instead of re-inventing the wheel.The precise activities will be determined once project details have been worked out.
Where will these actions be taken?
The idea would be to pilot the project in a low income country that has already a climate risk insurances in place. Malawi and Kenya could be appropriate countries. Both countries are member of the African Risk Capacity (ARC) and for both countries a digital social registry promises substantial benefits.
Malawi, on the one hand, because it is the only Southern African Development Community without any form of national registration and identification system. Only in May 2017 the government started to roll out the National Registration and Identification System (NRIS). It is envisioned to finish the project in 2018. The pilot could embark and follow-up on this project to catalyse its transformative effects for Malawi’s economic and social development. Key entry point for the pilot would be the National Registration Bureau (NRB). The NRB is a Government Department under the Ministry of Home Affairs and Internal Security.
Kenya, on the other hand, because it has already a fairly sophisticated social protection system, and with it a comprehensive database on beneficiaries. A digital information system has the potential to faciliate the integration of various programs and thus to enhance the effectiveness of Kenya’s social welfare system. Moreover, Kenya hosts a number of start-ups developing on blockchain-technology applications, including companies working on digital ID management and, thus, could provide the necessary expertise.
What are other key benefits?
It contributes to reach the SDG Target 16. It improves service delivery and governance with regard to social and humanitarian assistance. First, it allows for more timely and accurate assistance.A self-administered database removes an actor’s reliance on an intermediary (e.g. local authority, bank, NGO) to verify beneficiaries and distribute aid. Payments can be made directly via phones to those most in need.It allows to specifically extending financial protection to underserved vulnerable communities such as undocumented workers, women, elderly.Second, it reduces fraud and promotes transparency.The ability to change personal information independent of public authorities prevents adverse public interference while, at the same time, reduces the cost of public administration.Moreover, any cash transfer can be traced and accessed only by those who are entitled to them.Knowing that funds will receive their beneficiaries might incentivize diasporas and donors to providing additional funds.
What are the proposal’s costs?
Major expenses are associated with developing the use-case and the proof-of-concept.The field trial and subsequent evaluation should involve minor costs. Precise project costs depend largely on what is technically feasible given existing constraints, where precisely the project will be realized and the partners involved. To ensure feasibility a very limited field trail seems realistic. The following provides an indicative budget:
Phase (1): Develop a Use-Case
- Preparation of the project and selection of the country: 2,500 € + 2,500 € (TA via A2R/InsuResilience)
- 10-day fact finding mission in Kenya or Malawi: 7,500 € + 5,000 € (TA via A2R/InsuResilience)
Activities: project preparation, travels to present the project to local authorities and visit village communities; meetings with technical experts, and potential private stakeholders
Phase (2): Proof-of-Concept
- Development of project specifications and prototyping: 10,000 + 2,000 € (TA via A2R/InsuResilience)
Activities: Development of a detailed concept note (including criteria for database, role of various actors, technical issues and solutions, plan and evaluation criteria for a limited field-trial) and prototyping of components of the digital information system.
Phase (3): Field-trial
- Preparation of the field trial: 5000 €
- Field trail: 10,000 €
Activities: Preparation of MoUs for data-sharing, local travels to and data collection in villages, trainings how to use data template;
Phase (4): Review/Upscaling: 7,500€
- Evaluation/application activities: 5,000 € + 2,500€ (TA via A2R/InsuResilience)
Activities: Analysis of field trial and integration of findings in concept note; development of a plan for up-scaling
If the trail is successful, some funds could be dedicated to prepare an application to international climate funds’ funding streams, such as, for instance, the Green Climate Fund’s transformational impact program. A full-scale roll-out of the pilot would require funds in the range of 5,000,000€ – 9,000,000€.
The proposed pilot project set the stage for a digital and self-administered registry. The proposed pilot will require about 12 months. The first six month will revolve around developing the use-case and the proof-of-concept. The last six month will focus on the trial and the evaluation.
If the project is successful, it could be fairly quickly scaled up. It "just" needs sufficient funds and strong political and public support. If available, a cross-country extension should, in principle, be feasible over a 3-years period. From a political perspective it would make sense to cover high-risk areas first (year 1+2 after the pilot) and then move on lower risk areas (year 3 after the pilot). In short: the project could have transformational impact over the short term.
The examples of Gravity, BanQ, Accenture and Building Blocks show that blockchain can be a successful solution to the creation of digical registries:
Reports that explain blockchain and support the points being made in the proposal:
GSMA (2017): Blockchain for Development - Emerging Opportunities for Mobile, Identity andhttps://www.gsma.com/mobilefordevelopment/programme/digital-identity/blockchain-development-emerging-opportunities-mobile-identity-aid
ID2020 Alliance (2017): Commited to through improving lives through digital identity.https://static1.squarespace.com/static/578015396a4963f7d4413498/t/5a1c456f8165f542d6d50813/1511802225611/ID2020+Alliance+Doc+-+Nov+2017+%281%29.pdf
KfW (2017): Blockchain technology: how it works and what potential it offers for development.https://www.kfw-entwicklungsbank.de/PDF/Download-Center/PDF-Dokumente-Development-Research/2017-09-07-EK_Blockchain_EN.pdf
Ohnesorg J (2018): A primer to blockchain technology and its potential for financial inclusion. DIE: Bonn.https://www.die-gdi.de/uploads/media/DP_2.2018.pdf
World Bank (2017):Distributed ledger technology and blockchain. Washington, DC.http://documents.worldbank.org/curated/en/177911513714062215/pdf/122140-WP-PUBLIC-Distributed-Ledger-Technology-and-Blockchain-Fintech-Notes.pdf