Lessons from agency’s use of Blockchain


In a quiet neighbourhood in Nairobi’s South C last week, we sat down to listen to perhaps Kenya’s first deployment of Blockchain for humanitarian activities in northern Kenya by the Kenya Red Cross Society (KRCS).

To the KRCS team, it was just another new innovation on their journey from virtual bankruptcy to the present state where many business schools are interested in the society’s remarkable turnaround.

They were the first to build a social enterprise in hospitality and ambulance services to support their humanitarian activities. Their latest investment in technology is destined to greatly improve on efficiencies.

In May this year KRCS joined hands with their counterparts, the International Federation of Red Cross Society (IFRCS), to conduct a Blockchain open-Loop Cash Transfer pilot project in Isiolo County.

Their objective was to understand Blockchain technology’s potential for transparency and accountability, which are imperative in humanitarian activities.

Although Blockchain has been used in other places like in Syria, the Isiolo project was one of a kind. Previous use cases were largely in closed-loop payment mechanisms such as e-vouchers, where payments are linked to merchants’ specific outlets. The benefit of an open-loop model is such that aid can be delivered timely.

Besides IFRCS, there were other local partners who made this project succeed. They were: RedRose, who provided the cash data management platform; Craft Silicon who were the M-Pesa API integrator; and Safaricom who were the financial service provider.

KRCS, having registered beneficiaries, provided the necessary data that was then uploaded to the RedRose data management system. This seemingly complex process used an off-the-shelf solution and leveraged its native algorithm to secure transaction data with cryptography to deliver an immutable (indelible) digital ledger.

This enabled three organisations, that is, KRCS, IFRCS, and RedRose, to share similar data concurrently and in the process promote transparency and accountability.

The pilot was done in such a way that very limited information about the beneficiaries was recorded on the Blockchain in order to protect their privacy but the system gave all interested parties the power over the data that cannot be changeable by any one party without the other knowing what is happening.

And if anyone intended to change information, the previous data remains unchanged.

Findings from this pilot affirmed the promise of use cases for Blockchain. In terms of efficiency, it emerged that only a fraction of cost was incurred compared to previous similar interventions.

The system was effective in the sense that it took the shortest time to disburse the resources, confirm the transaction and reconcile KRCS books at the touch of a button.

Perhaps the best of the findings is the ability of the system to offer auditors an independent way of verifying a compiled list of transactions against records provided by individuals being audited.

The ability to scale up emergency activity required no additional investments as often happens when emergencies increase.

Blockchain technology especially now when the Government’s Distributed Ledgers and Artificial Intelligence Report is out brings hope that the report will be fully implemented.

A few infrastructural interventions will be necessary in order to have a smooth implementation. The roll out of high-speed broadband throughout the country will be critically important because there will be many other applications that will take advantage of the technology.

Some of the innovations will require new laws and regulations and since innovation precedes regulation, the government will have to facilitate progress through some legal sandboxes.