Could blockchain technology revolutionise the way NGOs deliver aid?

Blockchain has been labelled the future of aid delivery after the technology was successfully used to provide cheaper, quicker and more transparent cash assistance to Vanuatu. 

While money transfers are one of the most effective methods of aid assistance following a natural disaster, getting money into the hands of affected people can be a slow and complicated process.

This led Oxfam Australia to trial blockchain technology as a new way of transferring money to vulnerable communities, with the help of a DFAT grant.

The charity partnered with tech start-up Sempo and handed tap-and-pay cards loaded with around 4,000 vatu (approximately $50) to 187 residents of the Vanuatu villages of Pango and Mele Maat.

Close to 30 local shop vendors were then given smartphones allowing them to accept payments with the card.

Blockchain technology ­– a decentralised method of storing data where transactions are recorded in a transparent and secure way – was used in the trial to give staff a breakdown of what people were purchasing and when.

Sandra Uwantege Hart, Oxfam’s Pacific cash and livelihoods lead in Vanuatu, said the trial was well-received by the local communities.

In a country highly prone to natural disasters with not many banks or ATMs, she said the streamlined approach made delivering aid quicker and more effective.

“In our previous cash assistance programs in Vanuatu, this setup process took between 30 minutes and an hour of long lines and verifying paper lists. Using the Sempo app and platform, it now takes us less than six minutes to do this,” Uwantege Hart told Pro Bono News.

“Our project staff, managers and finance staff in both Vanuatu and Australia were [also] able to see these transactions happening instantly.

“This level of transparency is unprecedented – it reduces costly monitoring visits, and is easily extended to others, such as our donors, and local government officials, to show where aid dollars are being spent.”  

About 2,000 transactions were recorded during the trail, which took place over May and early June.

To protect the villagers’ privacy, a person’s purchases were not tracked but rather recorded in a general category such as “medicine,” “food” or “bills”.

Melanie Hardman, Sempo’s head of humanitarian operations, told Pro Bono News that aid delivery had been at times been quite slow and inefficient.  

But she said blockchain technology could be a way to shake up the sector and revolutionise the way NGOs deliver aid.

“Using digital platforms means we don’t need as much ID verification and can help people who don’t have documents or mobile phone literacy,” Hardman said.

“That means there’s greater reach and inclusion of people who are left out of the market. I think it’s the future of aid.”

Oxfam Australia humanitarian lead Josh Hallwright said the charity was already utilising blockchain technology in other countries around the world.

In Cambodia, Oxfam is using blockchain smart contracts so that people buying organic rice can see exactly where the rice came from and how it got to them.

The technology also enables pre-agreed rates to be securely and automatically paid to rice farmers.

Hallwright said Oxfam was interested in using blockchain to increase transparency and accountability in service delivery, while reducing costs and improving the impact of aid money that goes to vulnerable communities.

He said blockchain technology could also be used to shift the power dynamics in society.

“Increased transparency means you can shift how we organise society so people are much more empowered to assert their rights, whether it be with the people that they work for or the government they live under,” Hallwright said.

“People can have a lot more information at their fingertips in a much easier way.”

Hallwright added that the NGO sector needed to take action around the use of technology.

“It’s really important for civil society to be across new technology because it not only improves our ways of working but also is going to impact the people that we work with more and more,” he said.

“We need to use it so we can support people to assert their rights and become more empowered.”