A New Way to Distribute Aid
Disberse started last year as a platform for donors, governments and NGOs to more effectively track where their funds and resources are being implemented. Through a series of exact steps (project defined, funds issues, funds distributed, etc.), Disberse has created a clear-cut and effective method that allows for an expedited funding process in large part thanks to their use of mobile money and an auditable tracking system. The ultimate goal of the project is to be able to effectively trace every aid dollar from its recipient all the way back to its donor.
By harnessing a similar technology that allowed Bitcoin to gain global recognition, the groups are hoping to streamline money flow by implementing a blockchain. A blockchain is essentially a digital database that automatically tracks and records transactions, with each step being permanently recorded in an individual “block”. And, perhaps most importantly, the data is accessible by all parties involved. That’s why blockchains have the potential to be highly effective in cases where trust and integrity are central issues (i.e the international aid network).
“This exciting partnership could lead to the transformation needed in the way money flows through the humanitarian system,” Sean Lowrie, Director of the Start Network said, “this new project could catalyse a new way of working, one that is transparent, fast and which drives accountability to taxpayers and those affected by crises.”
Aid:Tech’s Digital Identity System
Disberse isn’t the only new technology to more effectively distribute aid. Meet Aid:Tech, another start-up working with blockchain to promote a more sustainable aid system. Aid:Tech has introduced “digital identities” to beneficiaries so they can access services not previously available to them such as electronic cash, social services and donations. That, paired with their use of blockchain, has introduced a system that is highly secure and traceable.
The basis of the system goes like this: an NGO will pinpoint beneficiaries and resources they want to provide (food, water, healthcare), the beneficiaries will then receive vouchers with QR codes, which they can redeem at a designated store or center, and a receipt for that transaction is then sent back to the NGO. The cashless system eliminates wasted or unaccounted-for funds, phases out currency conversion fees and ensures that every transaction is recorded, down to the dollar.
“We’re giving humanitarian organizations the ability to sidestep costly middlemen, to access and verify critical information, and to track the flow of funds and resources from donation through to delivery,” said Aid:Tech CEO Joseph Thompson. “It also gives people – beneficiaries and donors alike – the ability to know where their resources are going, and to have faith in the system.”
With the current system of aid distribution so scrutinized – and with all its flaws, one could argue rightfully so – it’ll be interesting to see how these new technologies will help make the process more transparent.