Oxfam and Sempo’s Unblocked Cash Project

The Unblocked Cash Project is built upon a successful collaboration between Oxfam, a global leader in delivering humanitarian assistance and Sempo.

Sempo is a mission-driven Australian Fintech start-up working at the intersection between humanitarian aid, technology, and financial services.

The project focuses on generating positive social change among some of the poorest and most at-risk communities in the world.

It does so by pioneering a decentralised model to address the global challenge of delivering international aid to disaster-affected women and men in ways that are more efficient, transparent, and sustainable.

Oxfam and Sempo’s partnership

The partnership between Oxfam and Sempo has interwoven innovative tech solutions with community dialogue and engagement resulting in a unique example of community preferences and voices that have been directly encoded into an application.

This innovation places disaster-affected people and their communities at the center of decision making related to their cash-based entitlements and addresses the global challenge of linking donors directly to those they want to support in ways that do not compromise transparency and accountability.

Together, they have piloted the first successful trial demonstrating community co-development of a blockchain solution to deliver localised, cash-based disaster assistance in Vanuatu.

The partnership seeks to address existing barriers by providing a tech-powered tool that effectively lowers the costs and entry barriers for a more diverse group of stakeholders to deliver cash assistance while lending speed and transparency to the process.

Moving forward, their objective is now to scale the UnBlocked Cash project across the Pacific Region and to replicate and test its application in meeting the needs of underserved and remote communities and explore the potential to scale in comparable contexts, globally.

The Context

In 2019, the global number of people requiring humanitarian assistance due to disasters, conflict, and poverty climbed to 132 million with an average length of humanitarian crises rising to nine years.

Local communities are always first responders – yet are rarely the main responders to the increasing challenges of natural, climate-related, and man-made crises.

The UnBlocked Cash project builds upon the global commitment to deliver more humanitarian and development programs in the form of cash, voucher, and market-based approaches.

It offers an opportunity to improve the efficiency of how aid is delivered by integrating digital financial inclusion and utilisation of decentralised networks for a more collaborative economy at the community level.

The Solution

The Unblocked Cash solution hails from Vanuatu, which is consistently ranked the world’s most disaster-prone country (World Risk Index).

Situated in the Pacific region, Vanuatu sits directly on the Ring of Fire, in the centre of the Pacific cyclone belt, and is on the front line of the climate emergency.

For Vanuatu’s population – spread over 80 islands – disasters cannot be prevented: they must be prepared for.

Sandra Hart, Pacific Cash and Livelihoods Transfer Lead with Oxfam said: “The philosophy of this project is built on the premise that having predictable relief and recovery mechanisms are central to the capacity of people in Vanuatu and other underserved communities to recover and maintain their resilience in a disaster-recurrent environment.

She explained how the initial objective of the project was to look into different gaps that have prevented similar projects from happening before.

“This solution was intentionally developed in order to address existing capacity and financial infrastructure gaps that have historically been obstacles to the delivery of cash-based humanitarian and development assistance”.

She spoke of the usefulness of blockchain in dealing with some of the more complex aspects of cash assistance.

“There are multiple areas where the solutions offered by blockchain align with some of the most difficult aspects of delivering cash assistance – tracking payments, lengthy reconciliation times, and difficult and costly monitoring and reporting.”

Blockchain infrastructure offers a high level of transparency and a running ledger of live, traceable transactions, from the moment funds, are “loaded” into the system, to the moment they are spent.

Algorithms enable the automation of reconciliation processes and linking of registration and payment data.

Stable, denominations of cryptocurrency, such as stablecoins, are pegged to local currency amounts allocated to each individual making payments to enable easier accounting and expenditure tracking for country offices.

Digital identification of recipients allows for cryptographic anonymisation, ensuring security without compromising transparency.

All of these processes are recorded and made available across a distributed network of “blocks” – allowing development agencies, donors, field teams, partners – to see what is happening across an assistance programme, in real-time.

UnBlocked Cash represents an open-ended, open-source, decentralised payment platform that allows local communities to engage directly in shaping the technology to suit their own needs, and own and operate the process of delivering payments – whether or not the world’s humanitarian agencies are present.

Hart went on to say: “The design of this solution involves the participation of informal vendors, both large and small, enabling a community-based economic recovery ecosystem where community vendors and recipients participate in the assistance delivery process, resulting in improved financial, economic and digital inclusion while supporting local economies”.

She discussed the Phase II pilot of the project and how it is being carried out in Vanuatu

“The Phase II pilot of the UnBlocked Cash project is currently ongoing in Vanuatu. It is now targeting 5,000 individuals and over 100 community vendors and has harnessed partnerships across nine local and international civil society, government, and private sector partners. Delivery times have been reduced by 96 per cent, and transaction costs are 60 per cent lower compared to past programmes”.

Sandra elaborated on how Phase II has a pivotal role to play in showcasing a truly beneficial cash transfer model.

“Phase II is a gateway moment – to demonstrate a truly localised cash transfer model that is a go-to solution for remote locations similar to Vanuatu, where the need for inclusion and local voices in the delivery process is critical, but not addressed in the existing humanitarian paradigm”.

She then discussed the aspirations of the project and how it could be an integral solution to the plight of underrepresented communities across the globe.

“This project has the potential to take a distinctive innovation from the Pacific region and offer it as a game-changing solution to under-represented communities across the rest of the globe. We have proven that we can build an open, digital, and financial infrastructure where traditional infrastructure and delivery systems are absent and that we can do so in a fully inclusive, accountable, and innovative manner.”

Oxfam and Sempo envision this as a solution for practitioners and local organisations alike, in locations where the capacities or means to deliver cash in a fast, dignified and transparent way, are otherwise absent.

Future plans seek to address the needs of over 2.7 million disaster-exposed and vulnerable people across the Pacific, as well as expanding use across Oxfam’s confederation, which reached 22.3 million people, across 90 countries, in 2018 alone.

Hand in hand, Oxfam and Sempo seek to harness the potential of this Pacific-grown solution and take it to scale globally.

Visit https://stories.oxfamireland.org/the-unblocked-cash-project to learn more.

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