Community Empowerment, Technology, and Access through Peer to Peer Systems by Nneka Sobers

Community Empowerment, Technology, and Access through Peer to Peer Systems: Blockchain Concept and Case Study in Accra, Ghana By Nneka Deandra Sobers Bachelor of Arts Urban Policy and Planning Virginia Tech Blacksburg, USA (2014) and Ayna Délivrans Verella Bachelier en sciences économiques et de gestion Université Catholique de Louvain Louvain-la-Neuve, Belgique (2011) Master of Arts in Economics American University Washington DC, USA (2014) Submitted to the Department of Urban Studies and Planning in partial fulfillment of the requirements for the degree of Master in City Planning at the MASSACHUSETTS INSTITUTE OF TECHNOLOGY June 2018 © 2018 Nneka Deandra Sobers and Ayna Délivrans Verella. All Rights Reserved The author hereby grants to MIT the permission to reproduce and to distribute publicly paper and electronic copies of the thesis document in whole or in part in any medium now known or hereafter created. Author_________________________________________________________________ Nneka Deandra Sobers Department of Urban Studies and Planning Department Urban Studies and Planning May 24of2018 th

May 24, 2018

Author_________________________________________________________________ Ayna Délivrans Verella Department of Urban Studies and Planning Department of Urban Studies and Planning May 24 2018 th

May 24, 2018

Certified by _____________________________________________________________ Albert Saiz Associate Professor, Center for Real Estate Thesis Supervisor Certified by _____________________________________________________________ Marie Law Adams Lecturer, Department of Urban Studies and Planning Thesis Supervisor

Accepted by______________________________________________________________ Professor of the Practice, Ceasar McDowell Chair, MCP Committee Department of Urban Studies and Planning

COMMODITY

LABOR

COMMUNITY EMPOWERMENT, TECHNOLOGY & ACCESS THROUGH PEER TO PEER SYSTEMS: Blockchain Concept and Case Study in Accra, Ghana

By Ayna Verella and Nneka Sobers

COMMUNITY EMPOWERMENT, TECHNOLOGY & ACCESS THROUGH PEER TO PEER SYSTEMS: Blockchain Concept and Case Study In Accra, Ghana By Ayna Verella and Nneka Sobers

THESIS COMMITTEE Advisors: Albert Saiz, MIT Center for Real Estate Marie Law Adams, MIT Deparment of Urban Studies and Planning Thesis Readers: Garnette Cagogan, MLK Visiting Scholar Extra Von Nothaus, MIT Enterprise Forum of Cambridge

Submitted to the Department of Urban Studies and Planning in May 2018 in partial fulfillment of the requirements of the degree of Master in City Planning

ABSTRACT A joint collaboration by Ayna Verella and Nneka Sobers, this thesis will explore the development of our start-up, ALL PPL. ALL PPLâ&#x20AC;&#x2122;s aim is to develop a Peer-toPeer (P2P) decentralized risk exchange platform that leverages blockchain technology to facilitate access to capital through local exchange and community empowerment. Capitalizing on how people informally lend each other resources and money, ALL PPL automates a trust network catered to increasing access to capital for underbanked users through two options; small crowdsourced loans and jobs through community projects. As part of our joint thesis, we have created and collected a shared database of quantitative and qualitative data for our initial market study in Accra, Ghana. Focused on marginalized communities as our targeted pilot group, we were interested in the community of Ayawaso East. Socially and economically excluded from the rest of Metropolitan Accra, Ghana, the municipality of Ayawaso East has become increasingly vulnerable. As access to mobile money increases and the quality of life decreases, residents are finding alternative resources to improve their communities. Inspired by the passion of Ayawaso Eastâ&#x20AC;&#x2122;s residents, ALL PPL has developed a unique product and business model to help the residents of Ayawaso East and similar communities across the world.

ACKNOWLEDGEMENT This is a story that is near to our hearts. As Afro-Caribbean women who have had personal encounters of how exclusion perpetuates disparity, we are happy to have translated our lived experiences into a powerful innovation. We would love to thank our Thesis Committee for their excitement and patience during our ambitious endeavor. Thank you to our parents who have believed in our vision from the beginning of time. Thank you for friendship and eternal sisterhood. And thank you to the inspiring community of Ayawaso East. We appreciate everyone who has been part of our journey and the stories of all of those who are living at the margins.

TABLE OF CONTENTS

1 2 3 4 5 6 7

p. 10

Introduction

p. 16

The Future of Financial Inclusion

p. 26

Blockchain: A Tool for Exchange and Transparency

p. 36

Learning from Ghana

p. 72

ALL PPL: A Global Solution for Local Empowerment

p. 126

Conclusion

p. 134

Bibliography

01 INTRODUCTION

There is an unspoken paradigm that marginalized communities cannot understand the complexities of the problems they face on the daily. The field of Urban Planning aims to bring tools to acknowledge these rights and create a voice for marginalized communities. In situation of inequality, inefficiencies emerge and resource allocation does not happen in ways to increase democratic participation. Financial exclusion reproduces a system of disenfranchisement and current policies cannot address the growing problem of civic distrust. This thesis is interested in ways to create tools that allow the voiceless to counter act the seemingly natural phenomenon of financial exclusion and promote self-empowerment with Community engaged planning through disruptive technology. “If the structure does not permit dialogue the structure must be changed” - Paulo Freire1 Financial Inclusion is the process of creating policy and tools to improve financial literacy, decreasing cost of usage and increasing disintermediation for those who are most likely excluded. To fight exclusion people have found alternatives, this thesis will look at these alternatives. Digital technology has allowed for a leap in financial inclusion, users are taking advantage of mobile phone technology to access capital. Credit comes from the Latin word “Credo”, to “Believe”. Financial institutions rely on a promise made to

repay debt incurred at a certain time in the future and financial institutions don’t cater to the growing needs of the unbanked. In our first chapter we will explore the current financial ecosystem and the challenges to address the widespread issue of financial exclusion. A blockchain is a peer to peer(P2P) trust based decentralized system where users are in control of the information they hold to exchange ressources. The system requires consensus across the different networks. When we hear words like consensus, trust, or exchange they resonate with us as urban planners and make us think of community and empowerment. We believe that in disintermediation of transaction technology there is power. We were interested in looking at the Blockchain infrastructure to understand its opportunities and challenges. Chapter 3 looks at how systems of algorithms can disintermediate transactions and create new structures of exchange. In the 1980s, the West African nation of Ghana was in crisis. Yet, Ghana’s real GDP growth rebounded from 3.7 percent in 2016 to 7.8 percent in 20172 The Ghanaian economy needs to create about 300,000 new jobs per year between now and 2020 3to absorb a growing population. VOiCE4 is a center for local governance, leadership, and research dedicated to promoting youth participation in decision making at the local government level and facilitating the implementation of socioeconomic development projects in the Ayawaso Sub - metro Area of Accra, 11

Ghana. Our field research involved a qualitative survey to assess levels of financial inclusion and technology adoption in the a neighborhood in Accra. We have also collected geographical data as initial Market Study in Ayawaso East. Chapter 4 summarizes our findings around Ayawaso East. As Marx states “Society is the sum total of social relations connecting its members”5 we want to rethink about ways to work with marginalized communities while rejecting the charity model from development institutions. We propose ALL PPL6. ALL PPL is a social enterprise that allows communities to connect and access capital. ALL PPL is a blockchainenabled P2P social platform where users can have access to small loans and access to jobs for local community improvement projects. Based on social networks and an innovative peer vetting system, users can exchange capital (in the form of money, mobile money or cryptocurrency), goods and services Our social mission of a transparent exchange community motivates our drive towards success. Capitalizing on how people informally lend each other resources and money, ALL PPL would automate a trust network catered to increasing access for underbanked users and responding to the need for more transparent interactions in community projects. ALL PPL’s aim is to develop a seamless decentralized risk sharing 12

service that leverages Peer-to-Peer (P2P) funding though trust circles. Community organization is key to the survival of social cohesion. To strengthen the disappearing role of communities, ALL PPL would allow for neighbors to reconnect. Chapter 5 and 6 are a proof of concept for the ALL PPL app and show how the ALL PPL app would be used in Ayawaso East.

INTRODUCTION 1 2 3

4 5 6

Freire, Paulo. Pedagogy of the Opressed. The Seabury Press, 1970. Ghana's 2018 Economic Outlook Positive but Challenges Remain.” World Bank, www. worldbank.org/en/news/press-release/2018/03/05/ghanas-2018-economic-out look-positive-but-challenges-remain. Honorati, Maddalena, and Sara Johansson de Silva. “Expanding Job Opportunities in Ghana, by Maddalena Honorati; Sara Johansson De Silva.” 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association), 1 Jan. 1970, ideas.repec.org/b/wbk/wbpubs/25208.html. "VOiCE." Millennium Cities Initiative Partners, Columbia University Earth Institute, mci. ei.columbia.edu/files/2014/08/VOiCE-brochure.pdf. Accessed 23 May 2018. Musto, Marcello. Karl Marx's Grundrisse: Foundations of the Critique of Political Economy. Routledge, 2008 Sobers, Nneka, and Ayna Verella. “Home.” ALL PPL, www.allppl.co/. 13

02 THE FUTURE OF FINANCIAL INCLUSION What is the current state of financial systems? Who is excluded in the financial system? What does an inclusive future look like?

The nature of financial services has changed. The traditional financial players are replaced by hybrid institutions that cater to a clientele with more access to technology and less access to capital. The diversity of products offered from financial institutions and the growing service industry has led to several changes in financial regulation and increased deregulation of most central banking authority. The era of automation and globalization has blurred geographical limits. Financial institutions have been compelled to design products that answer to an increasingly diverse clientele; However, those at the margins of poverty are not equally benefiting from capital markets. The rationale for the existence of financial institutions like banks, is to reduce information asymmetries and act as an intermediary between those who have, and those who don’t. These intermediary can be bypassed thanks to market liberalization, and the blurring of borders. Technological innovations have created an opportunity to rethink financial institutions as the sole actors capable of managing trust and processing information asymmetries. Chapter 2 will define financial inclusion in this new space and look at how technology has been disrupting the current financial landscape. We will explore different financial systems and answer the following three questions: • What is the current state of financial systems? • Who is excluded from the system? • How to measure inclusion? 16

THE IDEA OF FINANCIAL CREDIT AND MONEY

Peer to peer lending dates from the 19th century when individuals were acting as financial intermediaries. Joseph Schumpeter7 argued, that “Money is nothing more than a promise to repay”. The promises we made in monetary terms are known as “credit” and money has its basis in belief. Credit comes from the Latin verb Credo, “I believe”. To give credit is to believe and trust in a promise to be paid now or some time in the future. Throughout, time the idea of credit has created grounds for the idea of “the banker”. The implicit relationship with the “bank” is reliant on a social contract between individuals or entities with financial institutions. The social contract is around trust, time, and promises. Financial institutions rely on a promise made to repay debt incurred at a certain time in the future and at an agreed rate of interest. As, Pettifor8 notes, “Credit and debt, has been a feature of community life since the dawn of time”. Credit is “the trust which allows one party to provide money or resources to another party where that second party does not reimburse the first party immediately (thereby generating a debt), but instead promises either to repay or return those resources (or other materials of equal value) at a later date”. Credit services are provided for users to access resources they do not have. Pettifor adds that “credit systems existed in communities where there was familiarity

and trust – and where trusted figures – the priest, the chief, a trusted elder - upheld that trust”; Therefore, banks develop services to act as risk mitigation providers and to fulfill “promises” established as a socially driven construct. Adam Smith9 in the “Wealth of Nation” discusses the importance of barter systems. He argues that bartering is inherent to human nature and states: “It is the necessary, though very slow and gradual consequence of a certain propensity in human nature which has in view no such extensive utility; the propensity to truck, barter, and exchange one thing for another.” Bartering is a system where individuals exchange services and goods for other services and goods in return. Bartering is reliant on trust, individuals exchanging do not know if the services and goods are defective or inefficient. Money and the “price of money” (interest rate) are social constructs: social relationships and social arrangements based primarily and ultimately on trust. Money based exchanges have replaced bartering systems because they allow for trust in currency. We will now look at the platforms that currently exist for exchange in the financial systems.

NAVIGATING THE FINANCIAL ECOSYSTEMS Levine10 (1997) shows that financial systems contribute to reducing information asymmetries, transaction, and monitoring costs and allows risk diversification while improving resources.

What type of services exist in the Financial ecosystem and how are the products offered by these financial institutions used? “A bank is a financial institution that accepts deposits from the public and creates credit. Lending activities can be performed either directly or indirectly through capital markets11.” Banks are for profit institutions that allow individuals to access and manage capital. Banks have a responsibility towards shareholders to earn profit and responsibility to the deposit maker to protect funds; Therefore, products offered by banks are designed to make profit. Saving services allows for a wide range of activities like consumption, business development, retirement funds, education, insurance. In the context of emerging economies, saving services help manage working capital and allow for “consumption smoothing”. Consumption smoothing can be understood as the set of mitigation strategies used by households to have a stable path of consumption. To reduce cyclical economic uncertainty, individuals choose to give up some consumption today to mitigate against unforseen outcomes in the future. Small businesses are often engaged in cyclical activities. For example, for farmers, there is a delay between time of harvest, crop and sale, which results in cyclical income. Consumption loan allow for investment in shelter and education and other consumption durables. Saving 17

services allow depositors access to working capital and aims to increase productivity for the household. Banks must deal with doing well and doing good at the same time. To guarantee profit, banks use compliance rules to guarantee a strong lending portfolio. For low-income consumers, there is a need for smaller loans. The design of these small loans is problematic for banks because they spend more insuring the loans per currency. The high interest rate for micro loan increases transaction and loan cost which excludes low income households from accessing loans. The capacity for these households to repay is affected by high fluctuation in incomes;Therefore, banks perform credit analysis as if they were dealing with large credit loans which results in higher interest rates; Furthermore, based upon interest rate for deposits, the fluctuations of the inflation rate often make it more viable for these households to not have bank accounts. There is a growing responsibility put on Banks to increase financial literacy for consumers. After several global market crashes, banks have realized that most depositors do not understand cost terms and commitments. Banking institutions have to find a way to be sustainable and cater to the needs of low income households. Inequality of opportunity creates societal disparities in rapidly growing economic spaces. Income gap is growing and there is need for politically and socially sustainable development models. 18

Microfinance institutions emerged in response to unmet financing needs in these new hybrid markets. Microfinance provides access to finance and financial literacy, and has developed as a socioeconomic development tool intended to benefit indivudals who are excluded from the formal financial system. As, Baumann12 (2001) describes the role of Microfinance institutions “is to provide sustainable micro finance facilities to the poor and low income, self-employed or household-based businesses to facilitate income generation and reduce poverty”. Microfinance concepts were first tested in Bangladeshi villages in the 1970s and in 2006, Muhammad Yunus won a Nobel Prize for his microfinance work with his organization, Grameen Bank. However, the "microfinance revolution" has not led to its intended promises of inclusiveness. Over the years, Microfinance institutions (MFI) have not changed household livelihoods. In “Six Randomized Evaluations of Microcredit: Introduction and Further Steps”13, Banerjee, Karlan, Zinman find that there is no “statistically significant increases in household income or spending” by MFIs. The incentives for user of Micro-credit to repay is low because of cyclical expenses, for example, it is important to match the loan repayment schedule to match the houeholds.

Loan portfolios bear a lot of risk and it has been observed that the likelihood to repay loan is measured by the perceived utility of the service, the more clients wants to reuse the loan product the more likely they are to repay. To improve their loan portfolios, MFIs have been offering products that allow for households to pool risk: group lending. Lending circles have been in operation for centuries in different parts of the world: “Susu” in Ghana, “Soldes” in Haiti, “In-Hui” in China, “Notable” in Indonesia, “Cheetu” in Sri Lanka, “Tontines” in Cameroon, and “Pasanaku” in Bolivia. A group of individuals pool capital that rotates amongst members of the group. The general approach is described in the following graph:

MFI’s add additional requirements as safeguards like prompt repayment of loans, mandatory weekly meetings, and pre-credit orientation and assistance. In “A Test of Portfolio Risk in MicrofInance Institutions”14, authors find that “Grouplending methodologies reduce the risk in MFI portfolios compared to traditional individual loans”. Remittances, allow for efficient allocations of capital and are a catalyst in creating financial change (Rajan and Zingales)15. Remittances is defined by the World Bank16 as “Compensation of employees refers to the income of border, seasonal, and other short-term workers who are employed in an economy where they are not resident and of residents employed by nonresident entities".

FIGURE 1- Group Lending Process Source: A. Verella 19

Remittances allows for circulation of money between displaced communities. Remittances are essential in understanding the importance of financial inclusion and dictate the tools needed for vulnerable communities. As, Acemoglu and Zilibotti17 (1997) show financial development should mobilize savings from domestic and foreign sources; However, MFI cannot capture the increase in circulating capital from remittances and technological advances need new platforms for capital to be exchanged. Digital technology has allowed for a leap in financial inclusion, users are taking advantage of mobile phone technology to access capital. Payment services are “online services for accepting electronic payments by a variety of payment methods including credit card, bankbased payments such as direct debit, bank transfer, and real-time bank transfer based on online banking”.18 Payment services offer users direct access to their funds. Mobile Money is “a product or service offered by a bank or a microfinance institute (bank-led model) or MNO (non-bank-led model) for conducting financial and non-financial transactions using a mobile device, namely a mobile phone, smartphone, or tablet”. The new era of mobile technology is pushing for innovative product design. Mobile banking enables users to use their phone for payment services while this guarantees a mean to an end, it is often at the expense of financially illiterate users. 20

In the long run, inedaquate Know-yourcustomer(KYC) policies and consumer protection are being ignored and are furthering the gap in economic access. In the end payment services need to be adapted to the conditions, context and preferences of communities in emerging markets. The challenges are to find ways to redefine collaterals and understand behavior. The socially constructed norm imposed by capitalism means that not existing in the financial space often means not existing at all. Figure 2 highlights some positive and negative aspecs of the instutional ecosystem. The World Bank19 evaluates that there are 1.7 billion unbanked individuals in the world. The size of the “banked” population, i.e., the proportion of people having a bank account is a measure of the banking penetration of the system. Financial inclusion is the process of improving the terms by which individuals and groups access formal financial services access. The process involves creating policy and tools to improve financial literacy, decreasing cost of usage and increasing disintermediation for those who are most likely excluded: low income households and small businesses. When, looking at most cities in emerging economies, that is most of the population. Migration and financial inclusion are highly linked. In high income country, those marginalized are mostly immigrants. Ostry, Berg, and Tsangarides (2014)20 show how essential

BANKING

MICROFINANCE

MUNICIPAL SERVICE

MOBILE MONEY

POSTIVE ASPECT

NEGATIVE ASPECT

Built on a secure and safe system that aims to help save money and access credit

Growing inconvenience and increased cost for users; Exclusionary and non-transparent practices

Flexibility in understanding clients spending behavior; Targets customers in precarity

Corrupted system by users and providers; High interest rates discourage asset management

Built from the realization Difficulty in serving low that communities need to income communities. Ineffective delivery be organized. system

Mobile Money has replaced financial services due to ease of use and fast service

Lack of security and accountability due to overextended network

FIGURE 2- Institutional Advantages and Challenges Source: A. Verella 21

financial inclusion is in fostering inclusive financial growth spaces. As a result, we live in a dramatically altered financial intermediation landscape. In Emerging markets, there has been the urge to apply financial regulations from the West without an understanding of local markets. Inclusion is not limited to space, institutions, or capital. Figure 3 shows the compelxity of defining financing inclusive spaces. Access to this landscape defines social vulnerability.

MEASURING FINANCIAL INCLUSION An inclusive financial system should have as many users as possible. The index of financial inclusion as defined by the IMF21 identifies several dimensions to financial inclusion:

FIGURE 3- Financial Inclusion Source: UK, FinMark Trust. “FinScope Ghana 2010". 22

• Banking penetration • Availability of banking services • Usage Moving forward it is essential that new players entering the financial landscape work towards: 1. Understand new technology tools available 2. Account for informal sectors 3. Redefine financial literacy 4. Need for focusing on job creation 5. Do bankable products As the world population grows, access to credit is not improving. When living in precarity, it is difficult to manage day-to day cash flow management and the current financial landscape is unable to address this growing issue. When, looking at financial inclusion models and delivery mechanisms are essential. We need to take a second look at ways

financial inclusion is conceptualized. For example, filling a form is alienating and we need to change the way we are talking to people about finance. Lifestyle expectations are changing and new products are being created to meet the changing needs of customers, relying increasingly on the use of technology. The World Bank and the IMF22 argue that financial inclusion “reduces inequality of opportunity and mitigates the adverse effects of inequality on the level and durability of growth”.

While the current financial ecosystems work, the systemic barriers of entry shatters the financial social contract of “promises” made by financial institutions. The process of financial exclusion becomes a self-reinforcing process where social exclusion is reinforced by financial exclusion. How can we envision a more inclusive future? In, the next chapter we will explore the possibility of promoting empowerment through dis-intermediated and decentralized technology: Blockchain.

INCLUSION 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

Schumpeter, Joseph Alois., et al. History of Economic Analysis. Routledge, 1997. Pettifor, Ann. PRODUCTION OF MONEY: How to Break the Power of Bankers. VERSO, 2018. Smith, Adam. The Wealth of Nation. Dent, 1947. Ross, Levine. “Financial Development and Economic Growth: Views and Agenda”. Journal of Economic Literature , Vol. 35, No. 2. (Jun., 1997), pp. 688-726. “Bank.” Wikipedia, Wikimedia Foundation, 17 May 2018, en.wikipedia.org/wiki/Bank. Baumann, Ted. (2001). Microfinance and Poverty Alleviation in South Africa, Muizenburg South Africa: Bay Research and Consultancy Services : South Africa. [Online] Available: http://www.cmfnet.org.za/…/SA/MICROFINANCE. (September 07, 2007). Donovan, Kevin. “Mobile Money for Financial Inclusion.” Information and Communications for Development 2012, 2012, pp. 61–73., doi:10.1596/9780821389911_ch04. Crabb P.R and T. Keller. “A Test of Portfolio Risk Microfinance Institutions” . Faith and Eco nomics , (47/48), Spring/Fall Pag. 25-39 Rajan, Raghuram, and Luigi Zingales. “Financial Dependence and Growth.” 1996, doi:10.3386/w5758 “How Do You Define Remittances?” World Bank Country and Lending Groups – World Bank Data Help Desk, datahelpdesk.worldbank.org/knowledgebase/arti cles/114950-how-do-you-define-remittances. Acemoglu, Daron, and Fabrizio Zilibotti. “Setting Standards: Information Accumulation in Development.” SSRN Electronic Journal, 1997, doi:10.2139/ssrn.18620. “Payment Service Provider.” Wikipedia, Wikimedia Foundation, 22 Apr. 2018, en.wikipe dia.org/wiki/Payment_service_provider. “Financial Inclusion on the Rise, But Gaps Remain, Global Findex Database Shows.” World Bank, www.worldbank.org/en/news/press-release/2018/04/19/financial-in clusion-on-the-rise-but-gaps-remain-global-findex-database-shows. Ostry, Jonathan David, et al. “Redistribution, Inequality, and Growth.” Picture This -- Girl Power -- Finance & Development, March 2017, www.imf.org/en/Publications/ Staff-Discussion-Notes/Issues/2016/12/31/Redistribution-Inequalty-and-Growth-41291. Home | Global Findex, globalfindex.worldbank.org/#about_focus “IMF Annual Report 2017.” Picture This -- Girl Power -- Finance & Development, March 2017, www.imf.org/external/pubs/ft/ar/2017/eng/index.htm. 23

03 BLOCKCHAIN: A TOOL FOR EXCHANGE AND TRANSPARENCY What is blockchain? Why is it essential? Why has it not changed the world yet?

WHAT IS BLOCKCHAIN? There is widespread enthusiasm around blockchain technology. It promises to empower by disintermediating transactions between individuals; However, it does not seem the digital revolution promised by adamant blockchain innovators has had widespread adoption by every day users. We will explore in this section definitions and terminology around blockchain and discuss the difficulties in adoption. Nakamoto23 in Bitcoin: A Peer-toPeer Electronic Cash System states that “Block-chain creates a public ledger system where databases are linked with hash pointers.” More simply put, a Blockchain is a database structure for record keeping. On the blockchain, the transactions were built to record a transaction using a

cryptocurrency. The database structure can guarantee that transaction data is routine. A transaction ledger looks like an excel spreadsheet. s described in Figure 4, the blockchain is constructed from the ground up. To understand the database structure we must understand these four key features: 1. Block: A package of data with alpha numeric coding. It consists of a list of transactions and would typically have a block header, a transaction data set, transaction counter, and the block size 2. Hash: Alphanumeric code that connects blocks together in a chain. Block Hash is the function that links the blocks together. More, precisely, the solution to a mathematical formula is known as a “hash” that allows to solve the equation that links blocks together. When a block is

FIGURE 4- Blockchain Overview Source: Piscini, Hman, & Henry 2017, Deloitte University Press. 26

created, Miners take the information from a block, apply the mathematical formula to the hashing function then propagate that block. The block now has access to a series of nodes. Those nodes can run the block hash through the hashing function which allows for a consensus to be built in the network. The blockchain name for the hashing function is Proof of work. Miner needs to solve a hashing function to solve the next block Hashing algorithm, the results are known as “Proof of work algorithm”.

1 2

3. Chain: Link that connect lists of blocks together 4. Nodes: Nodes are a computer in the blockchain. There are two types of nodes. Light nodes add transactions so that miners can add the transactions into the block and pick them up. Full node allows for a full copy of the blockchain. Light nodes only push transactions for the minors to add to a block. The network connects nodes that maintain the database infrastructure. The transaction data is within the block, the block is chained together within a hashing function, and that hashing function requires previous block information to know how to add it. A parent block has multiple child blocks (this is called a fork). If, you change the protocol to allow old and new rule so you would have two child blocks from the same parental block. Each block is linked to the previous block in the chain and each block contains the hash of its parent within its own block header. To go back

FIGURE 5- Blockchain Anatomy Source: N.Sobers

and change all individual hash in the hash function is to make a change in the all the sequence of the block; Therefore, all the data in a block is immutable because of this sequenced structure(see figure 5). All other nodes must give consensus and confirm. Consensus across the different networks is essential to identify the block headers in the blockchain. Token and coins are used interchangeably and goes back to the decentralized notion at the core of the platform. Distributed ledger technology is in essence the sum of all the rules reflecting such consensus. Getting all the stakeholders to agree to the “rights” and the governance structure might be one of the most challenging aspects, particularly in forming multi-party consortium. 27

HOW TO MAKE A BLOCKCHAIN? As illustrated in Figure 6, the steps to make a blockchain are as follows: Step 1: You take a block hash from the previous hash taking metadata from the transactions that are in the block Step 2: Add the hybrid inputs in the hashing function (known as proof of work) Step 3: Then test by running nonces. A nonce is a single use random number added to the data you are coming up with a hash that is telling you that you have correctly answered the algorithm Step 4: Format it to the block hash and then broadcast it to the nodes Step 5: Nodes are taking the answer and verifying it that it was the correct answer.

ETHEREUM Ethereum24 is a decentralized platform for apps and other usage that runs smart contracts. It is a traditional blockchain that has a crypto-currency, ether. Ethereum changes the parameters of what the bitcoin blockchain does. It allows changing and editing individual parameters to tailor business needs. Ethereum platforms rewards miners based on collaboration. Smart contract hard codes â&#x20AC;&#x153;if/thenâ&#x20AC;? conditional statements. The purpose is to allow the software, and the technology to make a decision on its own, take external inputs and execute the conditions. Smart contract use an automated machine based escrow system. A smart contract knows to release or send a token to a 28

wallet when there is an external data trigger that forces the contract to execute. The blockchain act as an intermediary and reinforcement mechanisms for the smart contracts. Miners write the code, so at all times, the nodes know all the existing triggers, that create asset movement and other transactions. Transactions need to be submitted to a smart contract because there are constraints from the crypto currencies and depending on how the smart contract is written, you can use any currency. Anyone can be a party on a smart contract. Financial institution need to have ERC convertible wallet to interact with smart contracts. The Programming language used to build the smart contract is Solidity. ERC 20 standardizes the ether token on the Ethernet blockchain. Blockchain is now a platform and there needs to be programming language on top of that. It is important to know how to deal with the different version of the smart contracts. They enable automated security. Smart contracts create robust custodial services by eliminating the intermediary. Decentralized application allows for secure identity through cryptographic tokens and address and access to a P2P networking within a central server. Consensus uses verification algorithms with a Turing complete virtual machine (a supercomputer verifying the nodes) and allows for the maintenance of consensus on the network.

making a blockchain_

BITCOIN MINING

NEW BLOCK PROPOSED

HEADER OF MOST RECENT BLOCK

COMBINE & HASH

NONCE

HASH NUMBER

INCREMENT & AVERAGE

TARGET VALUE

IS HASH < TARGET?

DETERMINES MINING DIFFICULTY

SOLVED & PUBLISH BLOCK

MINING REWARD

FIGURE 6- Blockchain Process Source: E. Von Nothaus 29

Most decentralized blockchainbased applications have their own sets of rules, they must follow the rules of the platform on which they operate. As, De Fillipi25 notes, this may give rise to two distinct types of problems: "If there is a flaw in one of these smart contract platforms, the flaw can affect all blockchain-based applications that rely on the platform."

The challenges from adoption of a new technology come from getting users to adopt in a right way. Several cases of fraud, and money laundering have happened using blockchain powered tokens. The regulator is very far behind in terms of legal management of blockchain platforms. This decreases willingness to join and participate in distributed ledger technologies.

"Platforms implement â&#x20AC;&#x153;proxyâ&#x20AC;? contracts that delegate calls to other smart contracts, which can be updated by the platform developers."

While implementation and generalized access are not straightforward. The idea that through technology trust can be maximized, is novel and forces us to rethink the relationship between institutions and technology.

BLOCKCHAIN: WHY IT WORKS AND WHY IT DOES NOT WORK

BLOCKCHAIN IN THE REAL WORLD

Blockchain technology allows for security and automatisation. At every node, users can start from the beginning and recalculate each block to arrive at the block sequence. The result are then synchronized and allow for consensus. The information in each ledger is identical and have the same blocks. Each new block buries the history of the previous.

There are 400 different cryptocurrencies and blockchain has been used for payment and processes, virtual wallet, clearing, and settlement solutions developing and offering crypto-currency denominated products.

This allows for increased transparency and reduces the need for external audit systems. Digital assets can be exchanged with better algorithms. The main innovation of blockchain technology is that users on a P2P system can come to a consensus of what information is accepted. 30

Outside of financial services, Blockchain technology has applications in education energy sector, cyber security, supply chain, document retention, NGO and charity based application, and healthcare(see Figure 7). Level of access determines whether a blockchain is Public, Private or Consortium, more precisely: Public blockchain: Open to all participants. Users can participate to determine what blocks are added to the chain and what

state is the node. The Public blockchain is secured by “crypto economics”. Consortium blockchain: Controlled consensus process, there is a control on the preselected set of nodes but the right to read the block chain is public.

needs. Ethereum does an “uncle/aunt” rewards to spread the rewards to other miners in the block which increases the need for collaboration to bolster the network and get more miners involved with the reward system.

Private blockchain: Blockchain where to write on the blockchain you need permission. A central organization holds permission to the blockchain. Private block chains where developers don’t have access are built frequently. Financial services and businesses use these services to exchange and do research.

Blockchain expert Primavera De Filippi26 recognizes that “While this provides many benefits in terms of flexibility and upgradability, design can be problematic to the extent that it relies on a trusted authority (i.e., the smart contract platform operator) that could arbitrarily influence the operations of these so-called decentralized applications.”

R3 ECV or the Digital Asset Holding are distributed ledgers that regroup major financial institutions. Digital Currency Group supports the blockchain ecosystem and aims to build common solutions (it acts almost like a venture fund) business

For example, a peer-to-peer (P2P) lending platform, would allow for standardization and facilitate ease of use, you could reuse the same contract every time and have the agreements of the loans already coded into a platform.

FIGURE 7- Blockchain Application Across Industries Source: “Blockchain a technical primer", 2018, Deloitte Insights. 31

There is an autonomous nature in smart contracts, where there is no need for a human interacting which increases cost efficiency. P2P platform still works as an escrow holder and there are tokens

designed for P2P lending. We are interested in the infrastructure and the system and promises of blockchain. A P2P decentralized system where users are in control of the information they hold.

FIGURE 8- Blockchain Overview Source: Piscini, Hman, & Henry 2017, Deloitte University Press. 32

BLOCKCHAIN 23 24 25

Nakamoto, S. (2008) Bitcoin: A Peer-to-Peer Electronic Cash System. https://bitcoin.org/ bitcoin.pdf “Ethereum Project.” Ethereum Project, www.ethereum.org/. De Filippi, Primavera. “No Blockchain Is an Island.” CoinDesk, CoinDesk, 1 Mar. 2018, www.coindesk.com/no-blockchain-island/.De Filippi, Primavera. “No Blockchain Is an Island.” CoinDesk, CoinDesk, 1 Mar. 2018, www.coindesk.com/no-block chain-island/. De Filippi, Primavera. “No Blockchain Is an Island.” CoinDesk, CoinDesk, 1 Mar. 2018, www.coindesk.com/no-blockchain-island/.De Filippi, Primavera. “No Blockchain Is an Island.” CoinDesk, CoinDesk, 1 Mar. 2018, www.coindesk.com/no-block chain-island/. Namara, Suleiman. “Can Ghana's Extreme Poor Be Graduated?” Governance for Develop ment, 3 May 2018, blogs.worldbank.org/jobs/can-ghana-s-extreme-poor-begraduated. 33

04 LEARNING FROM GHANA Why Ghana? Can technology change the financial system? What is the local perspective?

According to a recent report from the World Bank27, the Ghanaian economy needs to create about 300,000 new jobs per year between now and 2020 to absorb a growing population. The current population of Ghana is estimated to be 29.46 million. The capital and largest city of Ghana is, Accra, with a population of 2.27 million. The Greater Accra Metropolitan Area (GAMA) has about 4 million inhabitants. In, this next chapter we will explore the impact of mobile money in Ghana and how it has contributed to financial inclusion. We will then explore findings from our field research conducted in Ghana.

REGULATORY FRAMEWORK

In Ghana, the Bank of Ghana (BoG)28 has the overall supervisory and regulatory authority in all matters relating to deposit-

FIGURE 9- Formal and Informal Banking Source: UK, FinMark Trust. “FinScope Ghana 2010". 36

taking and lending business, including banking. BoG’s powers are defined in the: • 1992 Constitution of Ghana; 29 • the Bank of Ghana Act, 2002 (Act 612) as amended • Banks and Specialized Deposit-taking Institutions Act, 2016 (Act 930). According to these regulations: “The Bank of Ghana regulates, supervises and oversees the activities of the banks and Specialized Deposits-taking Institutions (SDIs) to ensure that the banking sector and the payment ecosystem are safe, reliable and efficient. The Bank focuses on key issues relating to Anti-Money Laundering Countering Financing of Terrorism (AML/ CFT); consumer protection; promotion of competitive practices, assets quality, solvency, liquidity, earnings, systems and control and management with respect

to oversight of the mobile money subsector.”

FINANCIAL ECOSYSTEM IN GHANA

have savings accounts, while in the rural localities, only 21.5% of households have savings accounts. In the GAMA region, the proportion of households having a savings account is (54.1%) highest.

The following section descibes findings forn the Ghanain Labor Force Survey, (2015).30The most recent census has found that the annual average household expenditure in Ghana is estimated at GH¢9,317(USD 2,061) with a mean annual per capita expenditure of GH¢6,337(USD 1402). Urban households contribute more to the total annual household expenditure. The share of annual household expenditure urban expenditure (65.8%) is twice as much as that of the rural areas (34.2%). Additionally, the average household expenditure in urban localities is about 1.5 times that of the rural localities. In Ghana the average household spends the largest share of their monthly income, 46.7%, on food GH¢1302/month), and 12.4% on housing (GH¢395 per month). The financial tension between rural and urban areas shows in access to capital. More than 45 % of urban households

The three major sources of household income are from self-employment (non-farm), formal employment, and household agriculture income. The major source of household income, selfemployment, contributes to 48.3% of household income. Income from rent and remittances represents less than 5% of household income and for the extremely poor households, 86% of the population is engaged in less productive agriculture or self-employment activities predominantly in rural areas. Recent reports have found that the challenge is in quality and quantity of jobs available. The current unemployment rate for youth in Ghana is approximately 17%. The Labor Force Survey identified that the biggest challenge to starting or expanding household enterprises is “access to finance and technical know-how remain a major constraint”.

FIGURE 10- Interest Rates in Ghana Source: Bank of Ghana (2014), “National Payment System Strategy”.

Access to financial tools allows for more risk mitigation strategies and better “consumption smoothing”; However, access to Finance remains limited. The following table shows the interest rates from financial institutions in Ghana: MFI’s often have higher interest rates than commercial banks(see figure 10). At the end of 2015, there were 661 members of the Ghana association of microfinance companies (GAMC) in all the ten regions of Ghana (GAMC, 2015)31 whereas in 2018 the number of MFIs is down to 4432. The repeated failures of microfinance institutions has brought the Bank of Ghana to revoke the licenses of over 70 MFI’s in 2015 due to incapacity to sustain their operations. The repeated collapse has left millions of customers impoverished and victim to the system. According to Boateng and Acheampong 33 The collapse of the microfinance institution is due to “unduly risky, unethical and illegal practices, mismanagement and disregard of due diligence, which when convoluted by external factors like macroeconomic instabilities and panic withdrawals, pushed the risk levels of microfinance institutions beyond the point of containment”; Furthermore, the authors find that the MFI sector was plagued with solvency challenges, poor corporate governance practices, weak risk management practices, liquidity challenges, and regulatory breaches. More, precisely: • "Corporate Governance: Poor corporate governance and risk management 38

practices led to bank insolvency " •"Non-Performing Loans: Nonperforming loans (NPLs), led financial institutions to not be able to recover loans they have provided to their customers" • "Liquidity: Persistent liquidity shortfalls as a result of poor risk management, meaning that they were unable to honor their liabilities as they fell due" • "Solvency: Solvency challenges (more liabilities than assets with which to operate their businesses)" Microfinance is highly distrusted and people are skeptical about the capacity for small loans to create change. The government of Ghana has taken several steps towards protecting its clients. The proliferation of MFIs is limited by high interest rates. As developed in Chapter 2, access to capital has been identified as a source of development and Microfinance aims to increase this access.

There is a positive relationship between mobile money adoption and financial inclusion. Mobile phones are becoming more technically capable and less expensive leading mobile money to drive digital and financial inclusion. Recent studies34 have showed that there are more than 500 million registered and 174 million active mobile money accounts. The Mobile money industry is growing fast

MOBILE MONEY IN GHANA

and mobile money services are accessible in a two-thirds of low and middle-income countries. The mobile financial services' ecosystem is vast and highlights the potential of digital financial services from financial sector stakeholders. The fast growing sector rebirths hope for the underbanked. In “Protecting Branchless Banking Consumers: Policy Objectives and Regulatory Options”,35 the authors show how transformational branchless banking is rapidly changing the access to financial landscape. Porteous 36(2006) states that branchless banking can be either additive or transformational. It is additive when "it merely adds to the range of choices or enhances the convenience of existing customers of mainstream financial institutions". It is transformational when it extends to customers who would not be reached profitably with traditional branchbased financial services. In 2013, GAMA reported the highest proportion of mobile phone owners (73.5%). The survey identifies that 75% of Ghanaians preferred cash on delivery options, compared to 5% preferring credit or debit card options and 25% mobile money options. Giving unbanked and underbanked users the opportunity

to access a full range of needed form financial services could be a significant. step toward more equitable and efficient financial markets. The current regulatory framework in Ghana is favorable to the expansion of P2P platforms. In 2017, the Bank of Ghana established "Guidelines for E-money issuers in Ghana”37 which reinforces KYC regulations as well as security in a network. However, customers of mobile money remain victims of frauds and hackers and ; therefore, have difficulty fully trusting the mobile money system. The 2017 “Payment systems and service bills” passed by the Bank of Ghana allows for the payment of interest on mobile money deposits in the country. In the report "Impact of Mobile Money on the payment system in Ghana : an Econometric analysis" 38, the Bank of Ghana in 2016 (see figure 11) reported that mobile money volume of transactions registered a growth rate of 737.4% from 2012 to 2016 . The Mobile Money(MM) industry creates jobs for the MM agents, service providers and users including Fintech companies, merchants, retailers, and aggregators. The number of MM agents as of 2018 has increased by 52% and the value of mobile money transactions is up by 68%( see figure 11).

FIGURE 11- Mobile Money Growth in Ghana Source: Bank of, Ghana. “Impact of Mobile Money on the Payment System in Ghana".

Figure 12 shows the different motivations for borrowing. As there is an increase in usage of mobile money services, borrowing could also happen through these mobile money platforms. The following section will list definitions around Mobile Money operators: “M-banking” is defined as “an application of m-commerce that enables customers to access bank accounts through mobile devices to conduct transactions such as checking account status, transferring money, making payments, or selling stocks” . " The National Communication Authority (NCA) oversees security of customers’ data; and integrity of MM technologies. It regulates and oversees the activities of the Mobile Network Operators which own the Mobile Money Companies." "Mobile Money(MM) electronic cash

backed by equivalent amount of the Bank of Ghana notes and coins stored using the Subscriber Identification Module (SIM) in a mobile phone as an identifier. MM is issued by Mobile Money operators (MMOs) who keep the electronic account on the SIM in the mobile phone for the users of MM. Moblie Money(MM) services serve as electronic-wallets. More precisely, the Mobile money industry is composed of: 1. Forprofit-maximizing entities which issue electronic-money held in the banks. 2. Banks who provide infrastructure for exchange of money between parties and provide physical custody of the electronic money. 3. The Mobile Money Operators’ agents facilitate cash-in (converting cash into electronic form) and cash-out (issuing cash on demand) to ensure convertibility between MM and cash. 4. Merchants and retailers accept MM payments in exchange for different products and services". By mobilizing saving and guaranteeing access to funds, there is a more efficient allocation of resources and an increase in productivity.

FIGURE 12- Attitudes Towards Borrowing Source: UK, FinMark Trust. “FinScope Ghana 2010". 40

WELCOME TO AYAWASO EAST Based on the broad trends of how institutional voids have impacted marginalized communities, we sought to dive deeper into how these trends have impacted specific communities in Ghana. When selecting a target research community in Ghana, we were attracted to Accra, the nationâ&#x20AC;&#x2122;s capital, due to its diverse population of approximately 4 million people. Within Accra, we were interested in the contrast between the city being home to countryâ&#x20AC;&#x2122;s most powerful institutions as well as some of the most vulnerable communities. Furthermore, we wanted to narrow the scope of our research to identify how a particular marginalized community was using technology and resource exchange to overcome certain institutional voids their neighborhood experienced. Particularly in emerging economies, the government and non-private institutions have been pivotal in providing basic necessities. However, the traditional approach of non-private development has many limitations. The traditional models for aid and development are rigidly top-down, lack the inclusion of local engagement, and resources may not be adequately disseminated due to a lack of accountability and coordination39. With the rise of access to technology, communities who have been most deprived of institutional resources and services are overcoming their challenges through digitally-enabled community organizing. Through social media and

mobile money, communities are able to connect to each other, exchange money, and publicize their organizing efforts. It is through technology and digital exchange that communities are empowered to provide their own innovative alternatives to services that they have been denied of. In order to understand the complexities of community organizing as a response to institutional voids, we initiated our research by understanding the overall spatial and historic context of the city. Initial spatial and historical research includes identifying urban systems (ie. transportation, water, land use, and energy), and gaining insight on which populations may be historically excluded and marginalized. This information will help inform which parts of the city may be more vulnerable due to a lack of access in standard services. This indicator is crucial, because we wanted to target our research to more challenging community conditions in order to understand how to help bridge the gap in access. When conducting initial research, we were captivated by the story of a municipality located in the center of Accra, Ayawaso East. The story of this municipality is a narrative of how migration and unplanned settlement has made it difficult for Government services to provided basic necessities, particularly waste management. Frustrated by the lack of institutional engagement and perpetual social and economic exclusion, the residents of Ayawaso East have developed their own local systems to help fill the gaps in essential services. 41

Achimota Waste Center

regional context_

ACCRA, GHANA Nima Drain

AYAWASO EAST Municipality

Flags Hous

Agbogbloshie Waste Dump

+ FIGURE 13- Map of Accra 42 Source: N.Sobers

Jamestown Beach

Alliance Recycling Center

Kotoka International Airport

staff se

AYAWASO EAST Municipality Kanda Electoral Area

{

NIMA COMMUNITY : Area of Interest

Zone 1 Zone 2 Zone 3 Zone 4

250 500

1000m

Occupying an area of 2.5 km2 and housing over 95,000 residents, the Ayawaso East Municipality is the most densely populated community in Accra, especially Zones I, II, and III (see Figure 13). Ayawaso East is comprised of several neighborhoods, but its most identifiable neighborhood includes “Nima”, which is referred to as a Zongo. “A fascinating and understudied historical phenomenon in Ghana, Zongo means “traveler’s camp” or “stop-over” in Hausa and was used by British Colonial Officers to define the areas in which Muslims lived. Traditionally, the inhabitants of these settlements were Muslims migrating south from northern territories either for trading purposes or as hired fighters. Today, Zongos have become 44

a vast network of settlements, and there is at least one Zongo in every urban center in Ghana”40; However, Nima is reputed to be the most notorious Zongo in Accra due to its population size and perceived high crime rates. In the 1960s, Accra started to experience an urban growth caused by neighboring rural communities seeking access to more job opportunities. Capitalizing on the population increase, a "Ga" family, who owned what is now known as the area of Nima, leased their land to Northern Ghanaian migrants. Migrants from Northern Ghana are predominately Muslim and speak Hausa, as oppose to the widely-spoken Ghanaian language

of "Twi". Initially, Northern Ghanaian migrants sought temporary refuge in Nima with the hope of permanently settling in more established parts of Accra once they found secure jobs. Contrary to the initial aspirations of Nima, many migrants decided to permanently settle in Nima due to social and economic exclusion from the rest of Accra. Since Northern Ghanaian migrants were a new demographic, religious minority, and were often paid low wages, many migrants stayed in Nima because they did not have enough money to relocate, and they felt socially secure within their close-knit migrant community. As migrants permanently established their families in Nima, the

population began to rapidly increase; however, the available land in Nima became more restricted. The negative relationship between population growth and limited land availability has resulted in Nima being characterized as the most dense and haphazardly built neighborhood in Accra. Consequently, Nima was populated through organic settlement patterns, land was subdivided in an unplanned way. Because migrants would invite their extended family to come settle in Nima, a familyâ&#x20AC;&#x2122;s plot would be further parcelized between family members; therefore, large plots owned by the "Ga" people became spontaneously fragmented housing settlements. The settlement patterns of Nima spans across; 45

ayawaso east zones i, ii, iii_

OVERVIEW

Mamobi Market

Ayawaso North Municipality

“Gutter” : Nima Drain

Zone I

VOiCE Community Center

Ayawaso West Municipality

Kanda Electoral Area

Nim

a Ro ad

aH igh wa y

Zone II

Zone III Flagstaff House et

Stre ao

Nima Market

Zone IV

FIGURE 14- Ayawaso East Overview 46 Source: N.Sobers

Ayawaso West, Ayawaso North, and Ayawaso East. Due to an active local economy, urban centrality, and the home of Ghana’s President and Vice President, Ayawaso East has become an attractive site for prospective real estate development. Current real estate proposals include expansive luxury residential towers and businesses, but lack the incorporation of the existing local population41. Real estate development is seen as a viable option for the future of Ayawaso East, because Ayawaso East lacks many services that other surrounding neighborhoods have access to. Although Ayawaso East has access to water and electricity, there is a lack of an adequate waste management system and road network which would create a demand for infrastructure development. Although some residents hope that new real estate development in the neighborhood would encourage the government to invest in Ayawaso East’s inadequate infrastructure, most residents fear that top-town real estate development pressures would lead to the displacement of local residents. Regardless

Nima Market

of community consensus around new real estate development, most residents are united on other quality of life issues they think are more urgent than luxury condominiums; residents are extremely concerned about their neighborhood’s “waste problem”42and addressing the needs of improving waste infrastructure is a complex endeavor. As a result of the unplanned settlement pattern of Ayawaso East, accessibility is extremely limited. Focusing on waste management, we made an assesment of space management in the area (see Figures 14 and 15 ). Ayawaso East is predominately comprised of narrow alleys that are 1-1.5 meters wide, which are wide enough to only accommodate 1-2 people standing side-by-side. For example, using third-party spatial data, we were able to note that there is a stream that runs through the Northwester border of Ayawaso East; however, it was only through facilitated focus groups that we discovered that the stream is the site of the “Nima Drain” and the stories behind the infamous development project.

Flagstaff House

Ayawaso East Neighborhood 47

ayawaso east zones i, ii, iii_

ACCESSIBILITY

FIGURE 15- Ayawaso East Accessibility 48 Source: N.Sobers

High (10 m): Car Accessible Medium (5 m): 3 people Medium/Low (2 m): 2 people Low (1 m): 1 person

The network of narrow alleys makes it difficult for waste vehicles to deliver houseto-house waste pickup services. Being awarded the waste management contract by the Accra Metropolitan Assembly (AMA), Alliance Waste is the official provider of waste services in Ayawaso East. According to Alliance Waste’s Head of Corporate Communications, Mr. Jacob Nii Mingle, Alliance Waste’s competitive advantage is “having appropriate equipment” suited to handle the needs of Ghanaian communities43; However, even Alliance Waste’s expansive fleet is not able to access trash in the narrow alleys of Ayawaso East. To overcome the inability to use waste vehicles to serve the Ayawaso East’s residential interior, Alliance Waste services several communal waste bins located on the peripheral neighborhood roads. These communal waste bins are leased to bin operators who charge residents to throw away their waste. Sometimes residents walk more than ten minutes throw away their waste in formal communal receptacles, and pay upwards of GH¢10-15 (USD 2-3) to throw away a week’s worth of domestic waste (approximately 120 liters) (footnote

High Accessibility

to state that this is based on the average family size and household size). Residents who are unable to afford the GH¢1015 fee or walk to a communal waste bin resort to either pay GH¢3-5 (USD 0.701.00) to discard 9 liters of waste; pay an informal waste collector (Bolar taxis or neighborhood nuisances); burn waste; or dump waste in public areas. The most concentrated public area with litter is the “Nima Drain”. Spanning 1000m, the current state of the Nima Drain embodies the complexities of waste management in Ayawaso East. As a response to the alarming amounts of litter in the Drain and the support of Colombia University Earth Institute Millennium Cities Initiative, the National Government of Ghana adopted and implemented an urban design solution to improve vehicular access and reduce litter in the Nima Drain. The design intervention included a 20m wide pathway that would include two lanes for cars and a road median large enough to help pedestrians safely cross the road, as well as a paved surface to reduce litter blocking the local and regional drainage

Medium/Low Accessibility

Low Accessibility

ayawaso east zones i, ii, iii_

WASTE + SANITATION

Covered Drain Open Drain Communal Waste Bins Walking Radius: 5 minutes

+ +

FIGURE 16- Ayawaso East Waste + Sanitation 50 Source: N.Sobers

system. The construction on the Drain started in Fall of 2016, but shortly after a new President of Ghana was elected in Winter 2016, all construction on the Drain abruptly stopped. According to the Deputy Director of the Ministry of Works and Housingâ&#x20AC;&#x2122;s Hydrological Service Department, the construction of the Nima Drain has been suspended for the unforeseeable future because there have been complaints by the construction company, that the previous Presidential administration never paid the construction company for their work on the Drain. Figure 18 shows a timeline of the history around the construction of the drain. To date, the road median has been constructed, but residents are unable to wait on the completion of the Nima Drain to change their waste management habits. Since the Drain is centrally located and the largest amount of public space in Ayawaso East, the Drain continues to serve as an alternative garbage site for local residents. The issues present in the story of the Nima Drain is a microcosm of larger flaws that impact the overall environmental health of Ayawaso East.

Communal Waste Bins

Contrary to how neighboring communities in Accra perceive Ayawaso East, residents do not litter due to their "poor attitudes and perceptions towards waste [management]"44. The lack of proper waste management systems, absence of effective waste alternatives, marginalization of Zongo residents, and ineffective governance are factors that account for the critical condition of existing waste management in Ayawaso East. Although the government and private waste organizations had a very formal and top-down approach to waste management in Accra, their approach failed the specific needs of Ayawaso Eastâ&#x20AC;&#x2122;s residents. Instead of the Municipal Assembly and Alliance Waste providing more options to accommodate the vulnerable circumstances of Ayawaso East, the top-down authorities continued to respond in a way that still left the residents feeling excluded and neglected. In retaliation, informal community action has been the response to finding an alternative way to improving Ayawaso Eastâ&#x20AC;&#x2122;s environment.

Open Drain

Bolar Taxi

existing waste system_

INFORMAL TRANSACTION:

ENTITY:

FORMAL TRANSACTION:

INFORMALITY AS A RESPONSE

FIGURE 17- Informality as a Response Source: N.Sobers 52

ayawaso east_

HISTORY

A ZONGO IS BORN Migrants from Northern Ghana and neighboring countries moved to Accra for work opportunities. The original land owners of Nima, the Ga people, leased their land to the incoming immigrants. Many of the original immigrant families still reside in the Nima Zongo

1960

1970

N I MA MARKET Neighborhood market establishes and becomes a major destination for local entrepreneurs and farmers

1980

1990

CONSTITUTION RESETTLEM ENT PLAN Government Ministry established neighborhood upgrading plan for Nima, which would involve compensating Nima residents to relocate to Medina neighborhood of Accra. May residents refused the resettlement plan

FIGURE 18- History of Ayawaso East Source: N.Sobers 54

April 1992: Ghanaâ&#x20AC;&#x2122;s new Constitution establishes the Accra Metropolitan Assembly (AMA), voting, and tax system that has influenced the level of investment in Ayawaso East

N I MA DRAI N June 2015: In efforts to gain reelection votes from Ayawaso East, the National Democratic Congress (NDC) presidential party adopted the MCI’s plan for redeveloping the Nima Drain

DEVELOPM ENT BOOM The economic success of Nima Market attracted private investment in roads, health clinics, and banks in Ayawaso East despite the neighborhood having a reputation of being undesirable and dangerous

2000

CONSTRUCTION October 2015: After deadly floods in Ayawaso East, the NDC hired Queiroz Galvão Construction to build Nima Drain redevelopment project

N I MA POLITICS January 2017: After the NDC lost reelection, the winning political power New Patriotic Party (NPP), established new government contracts for development projects. Shortly after new contracts were issued, Queiroz Galvão Construction claimed that they have not been paid for their work in building the Nima Drain. In retaliation of not receiving compensation, Queiroz Galvão Construction stopped all construction of the Nima Drain. To date, the controversy has been unresolved

2010 VOiC E Voice In Community Empowerment (VOiCE) was founded by local community leaders who are dedicated to bridging the gap between local governance capacity and youth empowerment

“PROC ESS” TEAM October 2017: Local residents formed “Process Sanitation Team” to organize efforts of removing litter around Nima

AYAWASO EAST M I LLEN N I UM C ITY Designated by the Earth Institutes Millennium City Initiative, Accra became a targeted city for urban planning innovations and investment

March 2018: With a population of over 95,000 people, Ayawaso East became an official municipality of Accra as oppose to it’s previous status as a submetro. As a municipality, the tax revenue of Ayawaso East will directly go towards local municipal projects 55

The gaps in the formal way of managing waste resulting in informal measures is not only a story that is specific to Ayawaso East. Figure 19 shows the cpmplex informal landscape. Community mobilization as a form of social resilience is a universal narrative that is most common in marginalized communities. According to Gregory Fairchild45, segregation has led to opportunities for marginalized peoples with limited resources because those who are marginalized have more tactic knowledge of the communityâ&#x20AC;&#x2122;s needs than outsiders; outsiders would rather great social distance from those who are marginalized there is less interest by the outsiders to partake in the labor and consumer markets in marginalized communities; and marginalized communities are able to reinforce trust and bounded solidarity within their communities.

UNDERSTANDING THE LOCAL PERSPECTIVE

As marginalized communities are socially and economically excluded from the mainstream, they rely on trust in each other and the creation of their own alternative systems as an act of resilience. In Ayawaso East, we have observed that mobile technology and social networks have been transformative tools in helping local residents connect with each other, exchange resources, and create local jobs. In order to capture a story as complex as the one of Ayawaso East, conducting quantitative research remotely 56

is not enough to suffice. Therefore, being embedded in the local community is essential to further contextualizing broad data trends. Essentially, we aim to understand how trends in institutional voids and community engagement were being thought about and practiced in vulnerable communities in Accra, specifically Ayawaso East. In order to understand local knowledge, we conducted research trips in January and March 2018. The research trips involved becoming embedded in the Ayawaso East community; to become an active member of the community rather than an extractive researcher. In addition to building friendships and trust with local residents, we conducted interviews, focus groups, and surveys in order to document quantitative and qualitative records of their community resilience. The interviews and focus groups were focused on two particular topics: Financial Inclusion and Community Organizing. More specifically, Financial Inclusion included understanding cash flow, assets and lending behavior. While Community Organizing explored how the local residents created their own

employment opportunities to provide local essential service. Interview guides were used for gathering of primary data. Data collected was analyzed using descriptive statistics such as frequencies and percentages. Also, to conduct our qualitative data analysis we used a coding method for the opinions given by the participants to determine recurring themes, basic themes, organizing themes and global themes, which gave the following findings. Our interviews 75 participants which were between 18-65 years old. Conditions to participate in the study were to own a smartphone, speak English, and live or be regularly engaged in Ayawaso East. We chose this sample of the population because it allowed to filter for literacy and level of income. Our participants were small business owners, street vendors, and community activists. 75% of the survey responders were women. The interview had five sections. Through the interviews, we wanted to understand the decisions making rationale behind willingness to take out a loan and access to financial institutions and preferences in term of lending and entrepreneurial

pursuits of the interviewees. We were interested in understanding how the use of social media facilitated local trust and organizing. SECTION 1: GENERAL INFORMATION The first section wanted to understand general demographics of participants. We were interested in knowing past employment and measure how our participants dealt with cyclical poverty. In average most people we interviewed were entering their first job or had been in similar positions their whole life. They had started a small business after finishing school or had inherited this position as part of a family business. This finding was not surprising because most people we interviewed were street vendors in a popular market place in Accra. SECTION 2: FINANCE The second category of questions we asked was about our userâ&#x20AC;&#x2122;s access to capital and preferences in terms of saving and forms of finances. We wanted to understand the range of income, how often they ask for money, to whom they asked and how likely they were to give

out loans to peers. Most participants reported needing between GH¢100- 250 of additional income per week and would usually ask the same person in their network, which was given by close family member. In our survey, reported monthly income was lower than the national average. We found that many interviewees distrust Microfinance institutions. They reported that often these institutions would “leave with their money”. They reported that the only way for them to trust an MFI is if they have repeated interaction with MFI agents and see a physical MFI structure. Our interviewees told about the horrors of seeing their neighbors lose their business and only sources of income because of unforeseen bankruptcy of MFI’s. While most of our users had bank accounts they mostly disliked going to the bank because of time constraints. They described the process of going to the bank as being burdensome as they were often “long queues and system failures”. Also, we found that having a bank account is a symbol of social success, it shows literacy and modernity. The younger interviewees all had bank accounts and expressed pride even though they did not use their bank account. Traditional Loan mechanisms like “Susu’s” were well understood and used by our users. It was described as a “last minute” resort and not a long term viable solution to credit. Several banks in Ghana 58

offer Susu loan Products. A typical Susu loan product as described by interviewees is a 1 year targeted savings account which encourages regular monthly savings and allows customer to deposit equivalent of the regular monthly savings. Applicants must be 18 years and must meet minimum KYC requirements. Initial account opening balance of GH¢50. Minimum mandatory regular monthly contribution of at least GH¢50 for 12months post account opening. Most banks have a nonnegotiable withdrawal policy, and have users wait one year before being able to withdraw or customer loses all special interest gained. Our interviewees greatly disliked the services. Mobile Banking is very popular due to tis convenience and ease of use. Customers mostly trust the mobile money operators even though several cases of fraud have been reported. Users of mobile money have a concern with privacy when using Mobile Money and sometimes do not wish to share information on amount being transferred or received. SECTION 3: TRUST We asked questions about relationships with peer, trust and network. We found that most interviewees were not very trusting and needed repeated transactions with a person to trust them. While relationships in neighborhood was usually described as being good, there was a desire for secrecy and privacy in affairs which stops people form trusting each other.

We asked what are the reasons for trusting and the reasons for trusting were usually based on relationship and perceived reputation. Our interviewees usually trust their family and their trust circle is sized between 1-5 people. SECTION 4: ACCESS TO TECHNOLOGY We asked our users about their app literacy and their favorite mobile application. Most interviewees did not download the applications on their phone alone and had designated a person as a â&#x20AC;&#x153;technology expertâ&#x20AC;? help in the neighborhood. Adoption of an application usually goes from word to mouth and users will download an app if they have common usage of it. The most popular apps downloaded are WhatsApp, Facebook and Temple Run. Social media is used as a mean of communication and business development. Often vendors will broadcast their new products to sell using WhatsApp and Facebook. Social media is truly a community tool. We found surprising the frequent usage of games, with the older interviewees.

their public efforts in creating opportunities for either youth empowerment, local governance, and waste management. We asked these interviewees what inspired them to take action, how do they advertise their initiative or get people to help them, and challenges they may experience when organizing. We found that the respondents were inspired to take action because they were disappointed with how the lives of their neighbors were negatively harmed by the lack of services availability in the community. We also discovered that organizing largely took place through social media, especially WhatsApp and Facebook. Organizers would often message images or a text to alert friends of their initiative. The friends would then send it to other people they think would be interested in the initiative. Therefore, mobile technology is essential in helping organizers promote and coordinate their initiatives. Some of the challenges that the respondents faced included needing money to implement their initiative or coordinate materials needed for the initiative.

SECTION 5: COMMUNITY ORGANIZING Based on a selected interview group, those who were considered as community activists, we ask to explain their involvement in overcoming lack of services and improving the quality of life in Ayawaso East. The community activists were well-known to the community due to 59

field study_

LOCAL KNOWLEDGE

Since Ayawaso East lacked reliable spatial data, we were able to expand on the work of local community activists and Columbia University Earth Institute Millennium Cities Initiative in order to coalesce various quantitative and qualitative data to understand Ayawaso East from a holistic perspective. Since it was crucial for us to build a sincere and long-lasting relationship with local residents, we were able to establish a crucial relationship with a prominent local community organization, Voice in Community Empowerment (VOiCE). Founded in 2010 by local resident, Ahmed Yaajalaal, who also serves as President of the organization, VOiCE is 62

a center for local governance, leadership, and research dedicated to promoting youth participation in decision making at the local governance level and facilitating the implementation of socio-economic development projects in Ayawaso East. In addition to engaging the community from within, VOiCE works closely with a diverse set of stakeholders (government, grassroots initiatives, schools, international agencies) in order to promote transparency, accountability, equality, and self-reliance in Accra, Ghana. Out of the other community organizations in Accra, we were interested in establishing a permanent relationship with VOiCE due to VOiCEâ&#x20AC;&#x2122;s dedication to

its unique community, dynamic leadership, and enthusiasm towards collaboration. Since it was essential for us, especially as non-locals, to establish trust with a community partner, it was important for us to build a relationship with a community partner that has a greatest impact in their community and capability of maintaining a for a long-term partnership. We are focused on empowering marginalized communities, it is essential for us to use our tools to help celebrate and encourage the work of the existing community we are working with. Due to the fatigue of ineffective solutions from institutions and/ or community â&#x20AC;&#x153;outsidersâ&#x20AC;? , marginalized communities, particularly Ayawaso East, has experienced growing distrust of

those who are not from the community. Therefore, building trust, especially as foreign researchers, is needed in order to have an effective relationship with the residents. It is also important that the voice of the community is not erased or exploited. Consequently, we were sensitive to making sure that the stories we collected were synthesized in a way that the results of our research would directly address the needs the community has expressed. Since January 2018, VOiCE has helped us become an integrated part of the Ayawaso East community. VOiCE has helped us connect with local residents in order to facilitate focus groups, interviews, 63

pilot users_

PROCESS SANITATION TEAM

ABU

Founder

ZALIYA

Support Manager

FAISAL

Organizer

SULLEYMAN

SAFURA

Supply Coordinator

MAAMI

Recruiter

NURUDEEN

Waste Manager

ABDULLAH

Project Manager

FAROUK

Logistics Manager

meetings, and gather critical data to help further contextualize the preliminary data we knew about the community. In addition to getting a deeper understanding of the spatial, economic, and social context of Ayawaso East, VOiCE helped introduce us to a larger network of community activists. Through network sharing, VOiCE helped identify interviewees how were interested in working with us to help solve some tangible problems relating to inclusion and organizing in Ayawaso East.

UNDERSTANDING COMMUNITY NEED: WASTE MANAGEMENT After analyzing the context of Ayawaso East and conducting other general interviews, we identified a specific group of residents to be our pilot collaborators; the group identifies as “Process Sanitation Team”. As a response to the community’s frustrations with a lack of adequate waste management solutions, Process Sanitation Team created a grassroots initiative dedicated to removing litter in Ayawaso East. Founded in 2017, Abu, a local activist, founded and leads the volunteer-based waste pickup service. Every three days, Abu and his team identify and clean several blocks of their neighborhood. Over the course of their 1-hour clean-up session, Process Sanitation Team has collected upwards of 2,250 liters of litter, which equates to about nine 250-liter household waste bins. Since the founding of Process Sanitation Team, the initiative has gained

great momentum. Through the support of VOiCE, Pride of the East school, and numerous local residents, the Team has received donations in the form of cleaning equipment (wheelbarrow, brooms, and gloves) and over GH¢ 675 (approximately USD 150)46. This community support reflects how the residents of Ayawaso East are willing to support initiatives that help improve the health of their community. The form of the donations also indicates the culture of community exchange. Although some donations included money, most contributions were received in the form of labor and supplies. Due to the Muslim majority of residents in Ayawaso East, Abu and his community are unable to receive loans with interest, which limits the Process Sanitation Team from accessing loans in order to purchase resources needed to implement and scale their waste management initiative. In addition to Islamic financing constraints in accessing capital, Ayawaso East is a low-income community that faces other financial challenges in order to access money. In response to having limited economic access, barter exchange is commonly practiced in the community. Market research shows that residents who are in need of money often request funds from a trusted neighbor or friend in exchange for completing a service47. An Ayawaso East resident explains “It’s like what our grandparents used to do when trading their [crops] with each other… Instead of trading crops, someone gives me money and I can repay [my debt] by helping them with a task they need help with”48. 65

Through volunteer assistance and donations, local residents encourage and recognize that the work of Process Sanitation Team is an essential service needed to overcome the precarious state of waste in Ayawaso East. Currently, Process Sanitation Team is a volunteer-based initiative; the viability of the organization is dependent on people donating their time and resources. Abu expresses his desire to make the organization more reliable and robust. â&#x20AC;&#x153;Although my community and I are passionate about the work of [Process Sanitation Team], it is sometimes hard because we do not have enough [donated] money to throw away our trash after the clean-up. Or sometimes people cannot afford to volunteer because they 66

need money for their time. I wish there was a more reliable way to pay volunteers with water or other [resources] instead of moneyâ&#x20AC;?, Abu stated49. With the challenges Abu faces in managing Process Sanitation Team and the overall trends in overcoming institutional voids, we have synthesized our findings to create a tool that would help people like Abu and the residents of Ayawaso East continue to take charge of their own communities. Overarching issues of how access to money and jobs were overcome through informal peer to peer collaboration is the inspiration of our tool. Ultimately, our tool can be used as an empowerment tool for bottom-up agents

to organize and take ownership of their own initiatives. In the case of Ayawaso East, our tool will enabled local residents to become active agents in overcoming a system in which the government has failed to adequately address. By having Ayawaso East residents have absolute control of their own waste management system, the community would be an active agent in creating local jobs and facilitating dialogue with top-down stakeholders. Overall, empowerment through community ownership can help Ayawaso Eastâ&#x20AC;&#x2122;s residents leverage their right to stay in their community and avoid the threat of displacement.

Our tool, ALL PPL, is a peer to peer exchange platform that capitalizes on ways that marginalized communities have become resilient in the face of systematic exclusion. By incorporating technological innovations such as smart contracts and mobile money integration, ALL PPL is a solution for increasing financial inclusion through community empowerment. Chapter 5 will unpack ALL PPL as an innovative technology and business proposition.

GHANA 28 Ghana Statistical Service (2013): 2010 Population and Housing Census National Analytical Report. Ghana Statistical Service. Accra, Ghana. 29 “Ghana - Constitution & Politics.” Foreign Law Guide, doi:10.1163/2213-2996_flg_ com_081034. 30 G.A.M.C. “About Us.” About Us | G.A.M.C, www.gamcapex.org/about-us/. 31 Bank of Ghana, 2017, “ List of licensed microfinance institutions (money lending) in gen eral compliance with Bank of Ghana’s guidelines as at 31/12/2017” , https:/www. bog.gov.gh/supervision-a-regulation/register-of-licensed-institutions/provisio al-register-of-licensed-microfinance. 32 Ghana Statistical Service (2015): Ghana Demographic and Health Survey-2014. Ghana Statistical Service. Accra, Ghana. 33 “GSMA Mobile Economy 2018.” GSMA, www.gsma.com/mobileeconomy/.” 34 Boateng, Festival Godwin; Nortey, Stephen; Asamanin Barnie, Jonas; Dwumah, Peter; Acheampong, Martin; and Ackom-Sampene, Eunice (2016) "Collapsing Microfinance Institutions in Ghana: An Account of How Four Expanded and Imploded in the Ashanti Region," International Journal of African Development: Vol. 3 : Iss. 2 , Article 5 35 Leite, Denise, et al. “Protecting Branchless Banking Consumers : Policy Objectives and Regulatory Options.” Uruguay - Natural Resources Management and Irrigation Development Project - Environmental Assessment Report (English) | The World Bank, 11 July 2012, documents.worldbank.org/curated/ en/548061468337837606/Protecting-branchless-banking-consumers-policyobjectives-and-regulatory-options. 36 Porteous, David. 2006. “The Enabling Environment for Mobile Banking in Africa.” London: DFID. http://www.bankablefrontier.com/assets/ee.mobil.banking.report.v3.1.pdf 37 Bank of Ghana, 2015, “Licensing Requirements for E-Money providers” https://www.bog. gov.gh/privatecontent/Banking/Licensing%20requirements%20for%20emon ey%20issuers-Aug%202015.pdf. 38 Bank of Ghana, 2017, “ Impact of mobile Money on the Payment System in Ghana: an econometric analysis”, “https://www.bog.gov.gh/privatecontent/Public_Notices/Im pact%20of%20Mobile%20Money%20on%20the%20Payment%20Systems%20 in%20Ghana.pdf”. 39 Elumelu, Tony. Africapitalism: Empowering People Works Much Better than Giving Them Aid | Global Development Professionals Network | The Guardian. 19 May 2016, https://www.theguardian.com/global-development-professionals-network/2016/ may/19/africapitalism-empowering-people-works-much-better-than-gi ing-them-aid. 40 Williamson, Emily Anne. Understanding the Zongo : Processes of Socio-Spatial Marginal ization in Ghana. Massachusetts Institute of Technology, 2014. dspace.mit.edu, http://dspace.mit.edu/handle/1721.1/91419. 41 Ametefe, Wise. Personal interview. 27 March 2018. 42 VOiCE. Focus Group. 06 January 2018. 43 Mingle, Jacob. Personal interview. 26 March 2018. 44 Freduah, George. “Problems of Solid Waste Management in Nima, Accra.” National Honor Society for Human Sciences, 2004, http://www.kon.org/urc/v6/george.html. 45 Fairchild, Gregory. “Residential Segregation Influences on the Likelihood of Ethnic Self‐ Employment - Fairchild - 2009 - Entrepreneurship Theory and Practice - Wiley Online Library.” Entrepreneurship Theory and Practice, vol. 33, no. 2, 2009, pp. 373–95.46 Issaka, Abubakari, Personal Interview. 11 February 2018. 47 VOiCE. Focus Group. 06 January 2018. 48 VOiCE. Focus Group. 06 January 2018. 49 Issaka, Abubakari, Personal Interview. 11 February 2018. 137

05 ALL PPL: A GLOBAL SOLUTION FOR LOCAL EMPOWERMENT What is ALL PPL? How is ALL PPL an innovative solution? How does it work?

ABOUT ALL PPL Based on our analysis of global trends relating to mobile money and financial exclusion, we became interested in developing a tool that would empower marginalized communities. Our research indicates that marginalized communities that experience institutional voids are interested in ways to increase financial access through informal and local practices of exchange. Although individuals already use social media and mobile money to connect with each other and gain access to capital, their existing practices of community exchange are imperfect. Since individuals use social media and mobile money to facilitate lending and community organizing, the existing platforms are not capable of supporting the types of informal community interactions that we observed. Therefore, we have developed ALL PPL as an all-inclusive tool that is better equipped to help communities access capital through connection, exchange, and organizing. Since limited access to financial markets in emerging economies perpetuates cyclical poverty, ALL PPL attempts to redefine the financial landscape in order to make it more inclusive. By reshaping financial vetting processes and capitalizing on increasing accessibility to mobile technology, ALL PPL aims to connect users through a peer to peer platform designed for the specific needs of those needing consumption smoothing. This next chapter will examine the technological and social underpinnings 72

of our solution to the problems, as well as how our solution impacts marginalized communities, like Ayawaso East. Founded in Fall of 2017 by Ayna Verella and Nneka Sobers, ALL PPL was developed to provide more equitable and inclusive financial options while capitalizing on trends in social media and mobile money. As a result, ALL PPL is a peer to peer exchange platform that allows users to integrate their social media and mobile money accounts in order to access money by connecting to each other and exchanging resources. Since access to capital, especially to cover basic necessities, is essential in breaking the cycle of poverty, it is important that such communities have access to more flexible and non-predatory financial options. As explained in Chapter 2, traditional finance institutions may not be an option for those who are experiencing temporary budget constraints. However, at ALL PPL, we beleive a person should not have to be excluded simply because they may not have a valid form of credit or need a small amount of money fast. Since financial institutions have established policies that have protected them from having to engage in â&#x20AC;&#x153;riskyâ&#x20AC;? transactions, we have developed an alternative that allows users to gain access to capital without the constraints of financial institutions. Through our P2P model, users are able to formalize their informal neighborly behavior of relying on their community

to acquire money. ALL PPL is also enabled by blockchain, particularly smart contracts, in order to legitimize social relationships and financial transactions. All the transactions that are made on the ALL PPL app are recorded on the Etherum Blockchain network, which serves as a ledger for all Ether transactions. While a lot of ventures use blockchain to increase standardization and accessibility, most of these ventures are ignoring the “fortune at the bottom”. In order to ensure that the ALL PPL app is accessible and userfriendly, the user-interface of the app relies on simple visual cues, while the backend blockchain system. At a user’s scale, ALL PPL provides opportunities for human behavior to translate into a controllable and less risky financial process using data mining and innovations in blockchain technology. ALL PPL enables those who live at the margins to utilize their overlooked assets as a form of currency, ie. social reputation, knowledge, and possessions; access capital; increase their financial literacy; and increase creditworthiness. As a holistic system, ALL PPL allows users to have access to capital through two options; either through small crowdsourced loans or quick jobs through community projects. The app’s two features, “Peer Lending” and “Community Project”, are linked due to how they both utilize social media to connect and vet peers, and smart contracts to authorize transactions. Although the “Peer Lending” and “Community Projects” share some commonalities, the two features of the app

A LL P P L W W W. A L L P P L . C O

NETWORK + Peer vetting to capitalize on social reputation and behavior + Creation of Peer Circle, which is modeled similarly to group lending + Compatibility matching based on data mining in order to determine match users to suitable lending circles and community projects

FLEXIBILITY + Option to access capital through crowdsourced loans or quick job through community projects + Transactions secured through smart contracts + Payment options include barter exchange of mobile money, in-kind services, and valuable objects

EMPOWERMENT + Transparent and transformative option for financial inclusion and consumption smoothing + Redefining risk and credit worthiness 73

ALL PPL_

APP MAP

FIGURE 19- Map of ALL PPL app Source: ALL PPL 74

product overview_

ALL PPL APP

PEER LENDING

COMMUNITY PROJECT

COMMODITY

FIGURE 20- ALL PPL Process Source: N.Sobers 76

LABOR

have distinct processes and outcomes. Determined by a user’s preference, a user may gravitate to either the “Peer Lending” or “Community Project” feature based on their circumstances(see Figure 20). For example, the “Peer Lending” feature may appeal more to users who would like to acquire a specific amount of money quickly. Whereas, a user may be more inclined to use the “Community Project” feature if they would like an alternative to paying interest on a loan and are interested in being employed. The overall process of using the ALL PPL app includes the following steps: 1. Creating an ALL PPL account and completing the profile assessment 2. Inviting friends to ALL PPL app in order to establish Peer Circle through the social vetting process 3a. After new user has been vetted and the account has been completed, the user can either borrow or lend money using the “Peer Lending” feature. 3b. After new user has been vetted and the account has been completed, the user can create or contribute to a community project 4. Once a transaction has been completed, ALL PPL would factor the quality of the transaction into the user’s profile score. Transaction quality is based on user survey and activity data that is collected at the end of a peer lending or community project process.

APP FEATURES Ultimately, ALL PPL creates a formal, trusting, and transparent lending community. ALL PPL’s core services are to provide its users with the following features: USER PROFILE When a user opens an account on the ALL PPL platform they must complete a brief user assessment. A User Assessment is an interactive questionnaire where a user would have the opportunity to provide information about their social and financial habits. Once the Assessment is complete, then users could integrate their existing Facebook and WhatsApp profiles to the network. These features would enable ALL PPL to understand our user's behavior and interests. This knowledge helps ALL PPL match users to compatible peer networks, lending circles, and community projects. In addition to assessing a user through an initial questionnaire, ALL PPL also factors the user's transactions into a "profile score". The profile score serves as an alternative credit rating for in-app transactions. Based on a 5-star system, the profile score is based on the success of the user's transaction. Ultimately, the user's transaction history and profile score can be used as an alternative credit report that serves as leverage for users to acquire larger loans from larger financial institutions. Therefore, ALL PPL does not compete with financial institutions. Instead, it serves as an intermediate financial platform that can help users access money for consumption smoothing, develop knowledge of financial literacy, 77

and build credit for larger loans. MATCHING In order to extend the network of our users, ALL PPLâ&#x20AC;&#x2122;s algorithm aims to connect users based on geolocation, shared social networks, user's profile assessment, and transaction patterns. Matching is used when connecting borrowers with lenders; users with local projects/jobs; and users with peer circles.

COLLATERAL All members must deposit a collateral this collateral can be a monetary value, a physical asset. The physical asset will be determined with blockchain and secured with smart contracts. Users will determine their assets and we are testing the possibility to expand the traditional definition of physical assets to exchange. Lenders can exchange services based on their profession. This new barter system will allow for a different type of collateral and will be guaranteed for a specific type of loan. From the borrowerâ&#x20AC;&#x2122;s perspective, the monetary deposit partly guarantees against the risk of defaulting. Borrowers can either choose to deposit determined amount of funds. Borrowers have the option to access a pool of deposits that secure their loans. This pooled deposit is an innovation because of how it allows users to diminish risk and access capital. More precisely it allows the unbanked to determine assets as an empowerment tool. 78

PEERS CIRCLE Users ask friends / family to vet them as a trusted member of the community. These users will give a score to the borrower but also determine the amount at which they are willing to assure the borrower. The circle of friends will then also contribute to the collateral giving the borrower access to a pooled security deposit. This lowers the financial constraint on the borrower and allows the borrower to have more disposable income, which is the final aim of the platform. If the borrower repays his loan, the guarantees can then access a distributed interest rate. If the loan is not repaid, the guarantors must repay the loan to the amount that they have assured the lender. INTEREST To incentivize lenders to use the platform, lenders choose a bracket of interest rate that matches their own needs. The market place for interest rates will be competitive and the market will determine the best interest rate through an auction system for the best interest rate. Also, lenders that have diversified their deposit can use the platform as an asset management tool and will only have to decide if they want to take a risk with their portfolio or not. Borrowers can also make profit by repaying their loans on time. They receive a dividend of the shared interest, the more they repay their loans on time

or successfully renegotiate a loan. Users strengthen the platform by repaying their loans and reinforces the solidarity and trust circle. Some Borrowers are in peer circles and the scores each individual borrower receives is stronger with each repayment. The per circle receives a dividend of the shared interest, the more they repay their loans on time or successfully renegotiate a loan. Users strengthen the platform by repaying their loans and reinforces the solidarity and trust circle. Some Borrowers are in peer circles and the scores each individual borrower receives is stronger with each repayment. Also, lenders that have diversified their deposit can use the platform as an asset management tool and will only have to decide if they want to take a risk with their portfolio or not.

FINANCIAL LITERACY It is important to empower our users with financial literacy tools. We will provide games that allow users to understand the different steps of lending and building credit history. Also, users will have the option to compete with networks of peers for better scores. SECURITY OF THE NETWORK It is important that transaction are safe for both borrowers and lenders. Blockchain with smart contracts allow users to determine the value of their assets and trace funds. The following section shows a detailed walkthrough of the ALL PPL app. 79

ALL PPL INTRODUCTION

USER ASSESSMENT: PART I

Before a user has the ability to access ALL PPL's full range of services, they would have downloaded the app and complete the app's introduction and assessment. Upon initial opening of the app, the user will be introduced to ALL PPL through a brief tutorial (Screen 01). Since ALL PPL is disrupting the mainstream financial landscape, the tutorial will help users understand ALL PPL's unique principles, vision, and app features. The tutorial trains our users to be part of the culture change of promoting a transparent and equitable financial system.

User Assessment consists of questions to determine the risk and behaviors of the user. By disclosing geography, personality traits, social relationships, and types of activities the user likes, ALL PPL uses this information in order to match the user with compatible borrowers, lenders, peer circles, and community projects. As an example, let's say that a user's assessment reveals that the user lives in Ayawaso East, works as a school teacher, and enjoys building things. If the user would like to borrow money, ALL PPL would be able to suggest eligible lenders that also live in Ayawaso East and who may also be teachers or share similar hobbies. By humanizing our users and connecting them based on similar behaviors and

In order to get to know our users, ALL PPL requires new users to complete an assessment (Screens 02 and 03). The 80

USER ASSESSMENT: PART II

SOCIAL MEDIA INTEGRATION

traits, ALL PPL fosters an equitable social exchange platform. Through data mining and specialized backend algorithms we determine best user matches.

the platform, mobile money can be used as currency for loans and contributions towards a community project.

Once the user completes the assessment, the user would link their existing social media and mobile banking/ money accounts (Screens 04 and 05). Since our research revealed that Facebook and WhatsApp were the most frequently used social media platforms, linking those accounts would give ALL PPL access to other user traits and friends. Since ALL PPL is capitalizing on the high adoption and utilization rates of mobile money, existing mobile money platforms can also be integrated through the app. On

Once existing social media and financial accounts are linked, then a user would be able to establish their Peer Circle. Based on group lending described in Chapter 2, the Peer Circle increased accountability in a Peer Lending and Community Project transaction. Since peers in the user's circle serves as guarantors in case a transaction is not complete, it is important that a user invites peers that they trust. A circle consists of 3-5 people who the user knows and invites to the ALL PPL platform. By scrolling through their social network, a 81

MOBILE MONEY INTEGRATION

SOCIAL VETTING

user would be able to invite friends to join their circle (Screen 06). If a friend accepts the invitation, then they verify and vet the user. Social vetting of ALL PPL users is a process to mitigate and pool risk. In order to vet a user, a person would have to complete a social verification (Screen 07). The verification includes confirming data about the user they are agreeing to vet. By confirming the user's picture, location, and other facts, ALL PPL would be able to confirm the social relationship of the users.

Circle, and be a guarantor of up to 40% of the user's loans. Once a user finishes the vetting process, then they can join and modify their Peer Circle (Screen 08).

The user is also able to establish how much they would like to guarantee the vetted person. For example, a user can agree to vet a user, join their Peer 82

Peer Circle features include messaging, sending reminders, and editing the Circle. The users within a Circle are free to communicate and notify each other of transactions. Although the peers may know someone in their circle, they may not initially know the specific amount of money a person in their circle is borrowing; However, if the borrower in the circle is about to default on their loans, then their circle will be notified. The circle would be responsible for paying back the user's debt, and then the user's account

SOCIAL VERIFICATION

PEER CIRCLE CREATION

would be on hold until that user repays their circle. User penalties are on a threestrike system, which means that if a user defaults for the first time, they are given a warning and the maximum amount of money they borrow is reduced. If a second default happens, then the Peer Circle has the opportunity to remove the user from their circle and the user's borrowing and transaction limit is further reduced. If the user defaults for a third time, they are suspended from the platform.

indicated that games such as Candy Crush and Temple Run are very popular, especially among middle and older generations; therefore, ALL PPL has included financial literacy games to help our users make sound financial decisions while being entertained. According to Karl Kapp50, education through gamification increases motivation and engagement of the topic. Therefore, through games ALL PPL users will be equipped with essential knowledge to make self-empowering financial decisions on the app and if they choose to engage with formal banking institutions.

Since the platform serves to empower its users, financial literacy resources are available on the app. Financial literacy is accessible through gameification on the app. Our research

business plan_

MARKET FINDINGS MARKET STUDY FINDINGS: 90% Mobile Phone Penetration Average household expenditure > Average household income 22% increase in Registered Mobile Money Accounts Average user spends $188 on mobile money per month High volume of mobile money transactions 41% digital access to financial accounts 20% of Ghanaian have registered mobile money accounts

MISSION ALL PPL is a social enterprise. A social enterprise is â&#x20AC;&#x153;an organization that marries the social mission of a non-profit or government program with the marketdriven approach of a businessâ&#x20AC;?. We believe that is possible to do business at a human scale while helping the community. ALL PPL wants to develop a creative approach to foster business and social engagement. We wish to use our profit to fulfill a clear social mission. ALL PPL operates to contribute to social equality and improve living condition of communities by increasing access to capital. The profit generated is reinvested towards our goal of social inclusion. 84

Our Market strategy resolves a social problem and will be a mean for social change, at ALL PPL we empower and connect users in need of capital. We wish to increase civil society organization and increase operational freedom by reducing dependency from financial institutions We believe that blockchain technology offers new ways to connect and an opportunity for our users to make money by accessing capital. Our market study has yielded the results summarized in the table above. The recent reports have found that there are 26 million users with smartphones in Ghana. This makes an app

A L L P P L I N T E R P R E TAT I O N S : More than 26 million users have mobile phones Users spend more money than they own More than 300,000 jobs need to be created per year More than 11,248,758 active mobile money accounts 312,926,881 $mobile money transactions per month 12 million potential ALL PPL users More than 11,248,758 active mobile money accounts

based product highly likely to be adopted by owners of smartphones. Mobile phone literacy is high and there are 11 million active mobile money accounts. With 41% of people in Ghana having access to a financial accounts, ALL PPL will create a payment system platform for 12 million Ghanaians. Youth unemployment is on the rise, and ALL PPL can facilitate access to short term contracts that allows users to build market skills. According aforementioned, customer moved primarily cashing

to the GSMA report on average an active USD 188 per month, in and out and sending

person-to-person (P2P) transfers. This represent more than half of the average households monthly income.

IMPLEMENTATION OVERVIEW IN GHANA As discussed in Chapter 2, formal institutions, particularly financial and government entities, have excluded those who may need their services the most. The traditional models for aid and development are rigidly top-down, lack the inclusion of local engagement, and resources may not be adequately disseminated due to a lack of accountability and coordination (Elumelu). In addition to ALL PPL's service help facilitate filling the gap in institutional voids, ALL PPL measures its success 85

through social impact and profit. The 2017 “Payment systems and service bills” passed by the Bank of Ghana allows for the payment of interest on mobile money deposits in the country. The Mobile Money Operators (MMOs) provide mobile infrastructure, customer base and agents’ network. Interoperability is key to the development of our platform and ALL PPL will integrate several means of exchange. The 2016 regulatory guidelines from the Bank of Ghana have allowed customers to accrue interest on mobile money deposits, resulting in exponential growth in total deposits in that market. Mobile money customers can also purchase treasury bills through their devices, thanks to a collaboration between Ecobank and MTN Ghana. The current regulatory framework in Ghana is favorable to the expansion of P2P platforms. In 2017, the Bank of Ghana established ”Guidelines for E-money issuers in Ghana” which reinforces KYC regulations as well as security in network. However, customers of mobile money remain victims of frauds and hackers and therefore have difficulty fully trusting the mobile money system. ALL PPL ensures secure transaction on its platfrom thanks to blockchain. Our market study has determined that the volume of mobile money transaction is a total of GH¢981,564,563. It is estimated that users spend USD 188 worth of mobile money per month. ALL PPL is able to capture 17% of the volume of transaction. 86

Based on the number of active mobile money accounts reported by the Bank of Ghana, the total sizable market is 1,872,000 Million users. ALL PPL app targets to have 156,000 transaction monthly. ALL PPL charges an interet rate per transaction and could optimally generate USD 1,937,749 per month. The user interface will promote learning and increase financial literacy. The app will also have an automated chat box to engage users. We expect to break even in the first year after first launching our operations and have a monthly revenue growth of 6%. While we are confident from our need finding analysis that our customers and client base will grow quickly, software management KYC and security will likely drive our cost in the first years of implementation. We project a monthly burn rate of USD 135, 833. Trust is essential in ALL PPL product and methodology. Microfinance doesn’t work in Ghana because a lack of accountability from the users and providers. ALL PPL wants to address social impact from the bottom of the wealth pyramid and market a customizable product.

1 872 000

POTENTIAL USERS

17% Market Share of Customers

GHANA

ALL PPL YEAR 01

156,000 MONTHLY USER TRANSACTIONS

$1,937,749 Average Monthly Cashflow based on Average User Transactions

+ $1,937,749 - $135,833 Average Monthly Burn

= $1,801,916 Average Monthly Profit

REVENUE GROWTH Revenue

Average Monthly Cashflow

Month 87

market position_

FINDINGS PROS

Transparent Ledger system that guarantees economies of scale with cost reduction BLOCKCHAIN

Trusted platform with security in transactions

FINANCIAL ECOSYSTEM

High Mobile money penetration GHANA

FIGURE 21- Market Findings Source: A. Verella 88

CONS

ALL PPL STRATEGY

Regulatory framework not up to par with standards

Use Smart Contracts to ensure transparent transactions

KYC not adapted to emerging economies restricting access

Distrupt status quo to create flexibility and consumption smoothing

Difficulty to establish trust in microlending institutions

Strong community partner which allows for access to Market

ALL PPL

COMMUNITY PROJECT

PEER LOAN

SERVICE CHARGE

INTEREST

REGISTRY FEE

5 GH¢

FIGURE 23- ALL PPL Profit Model Source: A. Verella

From a long-term business perspective, ALL PPL anticipates global accessibility of the app. The company will be financially sustained through its small, yet widespread “transaction fees” and its fund management services. This transaction fee will be 2% on the interest charged by the lender and 2% for the borrower's peer circle. Our services will also charge for managing the registry for the community saving funds. ALL PPL charges a GH¢ 5 one-time fee for opening the account. We charge the service equally to borrowers, lenders, peer guarantors and users of the registry fund. We would like to first launch a sales force that would show our users 90

how to download and navigate the app. As switching costs are high, we will incentivize our users by allowing free access to the app and guided tutorials on lending. Through the peer vetting system users will be rewarded for connecting their networks to the platform. The user interface will promote learning and increase financial literacy. The app will also have an automated chat box to engage users. and be connected to social media platforms like Facebook and Whatsapp. These features will be challenging to implement and involve high involvement of all members of the ALL PPL team.

Mobile Money Operators (MMOs) provide mobile infrastructure, customer base and agents’ network. Interoperability is key to the development of our platform and will also present a challenge.

MARKET STRATEGY In order to scale efficiently and effectively, we have developed a specific market strategy that incorporates urban spatial planning and participatory action research methodologies.51 ALL PPL’s market strategy contains three pillars: Context, Community, and Customization, which span across three timescales (Short, Medium, and Long term). Dedicated to emerging economies, ALL PPL wants to change the relationship between business innovation and sustainable user empowerment. As a for-profit social enterprise, ALL PPL has developed a buisness model where the company can be financially sustainable without encompassing the conservative behavior of traditional for-profit companies. ALL PPL’s Impact Methodology embodies how social impact and financial viability are not mutually exclusive. However, in order to impact and profit, it is important for ALL PPL to scale and adapt its product to fit the needs of numerous communities. As ALL PPL plans to launch globally, scaling the company should not happen at random. ALL PPL is interested in cities that have high smart phone penetration and whose population

has a culture of informally exchanging resources. Once a prospective market has been identified, ALL PPL will commence the market strategy by researching the market context. This aspect of the strategy allows ALL PPL to use contextualized data towards customizing certain features of the app in order to address the individual needs of the cities we scale to. Synthesizing local context into tailored products can ultimately increase usership and impact without compromising scale and profit. When initiating research, it is important for ALL PPL to understand the social and spatial context of the prospective market. This broader context helps ALL PPL understand why the city and its communities are unique, as well as help connect us to a local community partner. Community is essential in furthering ALL PPL’s knowledge of local context. Through strong relationships with community partners, ALL PPL would be able to understand broader data trends through a local perspective. By being embedded in the community, ALL PPL would also be able to test and co-create our product with prospective users. By understanding a city’s context through local engagement, ALL PPL would be able to customize components of our product to suit the specific needs of specific users. In addition to being a technology company, ALL PPL is dedicated to changing the culture of the Financial Technology (FinTech) sector. ALL PPL is challenging the conventional assumptions made 91

about resource exchange and business in emerging economies. Ultimately, ALL PPL's market strategy assures that our product addresses the unique needs of each of our markets. As a way test the viability of ALL PPL's market strategy, we were able to deploy this methodology through our fieldwork. As exampled in Chapter 4, our approach to identifying Ayawaso East as a targeted pilot group was conducted through gaining a spatial and policy context of Ghana; and understanding how informal exchange was an alternative to overcoming institutional voids was a discovered through conversations with local residents. These findings have been synthesized to inform how customization of the ALL PPL product should occur.

CONTEXT TO UNDERSTAND MARKET CONDITION SHORT-TERM: Spatial and historical assessment of Market

MEDIUM-TERM: Analysis of policy and regulatory framework

LONG-TERM: Collection and analysis of user data and transactions

COMMUNITY

CUSTOMIZATION

AS A CATALYST

OF PRODUCT TO SUIT

IN PRODUCT AND

MARKET UNIQUENESS

BUSINESS MODEL SHORT-TERM: SHORT-TERM:

Identify weaknesses in existing

Assessment of local needs

services provided in Market

and relevant issues MEDIUM-TERM: MEDIUM-TERM:

Study strengths in existing

Recruitment of pilot users for

services and competition in

testing and implementation

Market

LONG-TERM:

Establishment of local community

Tailor the product to respond

partner as expert in local needs

to local needs

and network 93

market strategy_

FINDINGS SHORT-TERM

Spatial and historical assessment of Market: Ayawaso East is a vulnerable community that lacks access and infrastructure, which make it an ideal pilot group for ALL PPL

Assessment of local needs and relevant issues: Displacement and Waste Management are the most critical issues that the community faces

Identify weaknesses in existing services provided in Market: Lack of formal options to access capital and bridge temporary cashflow gaps

FIGURE 24- ALL PPL Market Strategy Source: N.Sobers 94

Dimensions

MIDDLE-TERM

LONG-TERM

Analysis of policy and regulatory framework:

Collection and analysis of user data and transactions:

Peer to Peer exchange and mobile money market is legal and robust in Ghana

Overtime, ALL PPLâ&#x20AC;&#x2122;s user and transaction records would be able to fill data gaps in marginalized communities

Recruitment of pilot users for testing and implementation: Process Sanitation Team has been selected to test the Community Project feature in order to expand their project

Study strengths in existing services and competition in Market: Mobile Money platforms are commonly used and community activism is high

Timescale

Establishment of local community partner as expert in local needs and network: VOiCE has officially agreed to be a partner in community and product development

Tailor the product to respond to local needs: ALL PPL has collected data in order to develop an accurate Registry for Community Waste Projects

product feasibility_

USAGE PREDICTION AYAWA S O E A S T F I N D I N G S : 90% Mobile Phone Penetration Muslim Majority Population Informal Bartering Exchange High Community Activism Precarious State of Waste Management High Youth Unemployment Cultural Etiquette of Gift-Giving and Donations

Based on the information discovered through the market strategy, ALL PPL has translated its findings into an adaptive approach that fits the market’s conditions. For example, ALL PPL discovered that a large majority of residents in Ayawaso East practice Islam and use their mobile phones to exchange mobile money; therefore, ALL PPL anticipates that users would have access and choose to use the ALL PPL app, especially since the community project feature allows users to gain access to capital without having to pay interest. Due to residents’ concerns about waste management and unemployment, ALL PPL foresees most community projects being a way to employ local residents and 96

addressing local waste management. In anticipation of the way ALL PPL predicts its user behavior in the pilot market, ALL PPL uses data, from ALL PPL and World Bank sources, to predict how many resources a waste management project would require. The automatic calculation of needed resources for the project is the “Project Registry” feature of ALL PPL Community Project product. Through the information Abu could compute when initiating a waste management project on the ALL PPL platform, the input data would be calculated to determine the suggested quantity of certain commodities and labor Abu would need to complete the project; for example, the recommended amount of pairs of gloves or hours of labor. An

A L L P P L I N T E R P R E TAT I O N S : Usage of ALL PPL app is highly likely Users have difficulty in accessing capital Users are likely to exchange resources on app to bridge cashflow gaps Project initiation through Community Project feature is very likely Most community projects may be targeted around waste management Community projects would serve as a job marketplace alternative Users are likely to contribute commodities to Registry

example of the algorithm ALL PPL would use is:

Initially some of the data inputs would be a combination of ALL PPL, and local data, but as ALL PPL gains more users, the data inputs would eventually rely more on ALL PPL user and transaction data. Therefore, the more usership and transactions occur on the ALL PPL platform, the more ALL PPL’s Project Registry will be more sensitive to specific market conditions. Although the ALL PPL product is standardized across its markets, customization of data inputs and algorithms are imperative to the assurance of ALL PPL being relevant in each market. For example, if a user in India wanted to initiate a waste project in their community, 98

the World Bank data used to calculate the average volume of waste generated daily in that particular community in India differs from the Ghana’s statistic. Also, community projects focused on water access may be more important to communities in India than Ghana. If so, ALL PPL would have to research what materials a person may need to implement a water project, and develop new algorithms to determine the recommended quantity of resources for that particular project scope. In order to ensure that ALL PPL’s approach to market customization is financially sustainable and scalable, ALL PPL uses reliable and internationallyaccepted data sources, like the World

Bank Open Data, and collects gaps in the data when facilitating the Context and Community portion of the ALL PPL market strategy. As ALL PPL becomes more established in the market, ALL PPL will be able to use its internal data to make more accurate predictions. The internal data can also be sold to specific organizations to help improve the quality of data available on the markets ALL PPL operates in. Although this market research and product development approach is a departure from traditional business models and requires more interactive engagement with the prospective market, ALL PPL's market strategy provides

numerous short, medium, and long-term benefits that enhance ALL PPLâ&#x20AC;&#x2122;s financial and social viability. By piloting in vulnerable communities, filling voids in available data, establishing long-term community partner relationships, and tailoring the companyâ&#x20AC;&#x2122;s products based on the behavior of each market, ALL PPL is an attractive option for many cities around the world that lack adequate access to capital. Now that ALL PPL understands the market need and has identified its pilot users, the following sections will explore how ALL PPL anticipates how users would utilize the product, specifically in Ayawaso East. 99

ALL PPL PILOT

FEATURE: COMMUNITY PROJECTS

Based on an initial understanding of vulnerable communities in Accra, ALL PPL became interested in piloting in Zongo communities. Through further research, ALL PPL was captivated by the complexity of waste management in Ayawaso East, thus dedicating the Ayawaso East Municipality as the initial pilot community. Since residents are unable to rely on the government to improve the state of waste in their community, ALL PPL became determined to deploy their product in a way that would enable the residents of Ayawaso East to connect with each other and exchange resources in order to create and manage local jobs through their community-owned waste management system, or allow residents of Ayawaso East to take out small loans.

Inspired by Process Sanitation Team’s unique approach to filling in gaps of service in Ayawaso East, we have synthesized our findings to create a tool for tailored their products in order to facilitate a more efficient and sustainable waste management initiative for Abu and the Process Sanitation Team. Capitalizing on the Team’s existing approach, the ALL PPL app will automate the current practice of exchanging commodities for labor. By using ALL PPL, Abu would be able to facilitate waste clean-up sessions and pay Process Sanitation participants by utilizing the app's project management, messaging, and smart contracts in order to formally hire and compensate employees for their time. Essentially the ALL PPL app would enable Abu to transform his volunteer based waste management team into an establish system of employees, revenue, and resources. ALL PPL’s community project feature would be able to address Abu’s concerns regarding organizing resources, participants, and payment. By initiating a community project as an ALL PPL user, Abu will be able to use ALL PPL as a tool to increase the publicity of Process Sanitation Team, accept donations, manage and pay project participants. When initiating a community project, Abu would have to complete a brief project assessment to establish the project. Through the data submitted in the assessment, ALL PPL would calculate the type and quantity of resources needed to complete the project,

This section will further explain how different users would use ALL PPL’s core features. The step-by-step guide will present two distinct users, Abu and Akua, who would use ALL PPL in distinct ways. As examined in Chapter 4, Abu is a pilot user would like to use ALL PPL’s “Community Project” feature to facilitate community waste management projects. The other user, Akua, represents how a user would borrow or lend money through the “Loan” feature. In addition to describing the overall process of each feature and the user’s experience, this chapter will analyze corresponding backend processes. 100

as well as how many hours of labor the task would require. ALL PPL does not impose projects onto a community, it helps community organizers legitimatize and aid existing community initiatives. Overall, ALL PPL would serve as a personalized logistics and management tool. In addition to helping Abu run the quotidian logistics of the Process Sanitation system, ALL PPL’s marketing and data features provide incentives for individuals and businesses to want to contribute resources or sponsor local projects. As a hybrid of existing business like Task Rabbit, Meet Up, and Kickstarter, the “Community Project” feature allows users, like Abu, to access money by creating jobs and promoting the local economy. Through

a six-step process, users can create and manage their own local projects and facilitate the exchange of commodities and labor.

101

process overview_

COMMUNITY PROJECT

PROJECT INITIATION A user can become a Project Manager by starting a community project on the app. To initiate a project, a user must complete a project assessment. The assessment includes a completing a brief questionnaire and project description.

REGISTRY CREATION Based on the questionnaire, ALL PPL’s backend algorithms calculate which resources are needed to complete the project. Once the registry is created and revised by the Project Manager, it becomes available to other users to contribute to the requested resources.

REGISTRY CONTRIBUTION Other users can browse and join a community project by claiming their contribution on the project’s registry. A user can sign up for contributing a commodity and/or labor. Once the contribution is submitted, it is confirmed by the Project Manager.

RESOURCE DISTRIBUTION Once the Project Manager approves of the contribution, the Project Manager and the contributor become bounded by a smart contract. The contract holds the contributor responsible for providing the resource that was promised on the registry, and in return will receive some of the additional registry resources as payment.

SERVICE COMPLETION In order to confirm the completion of the contribution, the Project Manager and the participant scan QR validation codes. In return of upholding the contract, the contributor would receive the agreed upon form of compensation.

PROJECT EVALUATION After the project has been completed, the Project Manager and contributor would complete a brief assessment to determine the quality of the transaction. The results of the evaluation would factor into the user’s profile score.

102

COMMODITY

LABOR

Item 1 Item 2 Item 3

Job 1 Job 2 Job 3

FIGURE 25- ALL PPL Community Project Overview Source: N.Sobers

103

HOME MENU

START PROJECT

Once Abu has downloaded the ALL PPL app and created his profile, he is able to access some of the features of the app. In order to delegate Process Sanitation Team through the ALL PPL system, Abu can initiate a community project. In order to do so, Abu can access the “Home Menu” of the app to display his account features. One of the displayed features includes “Community Project”. Once Abu clicks the appropriate button, the project initiation screen will appear, which is shown in Screen 02. Although Abu has the option to view other projects in his area and his project history, Abu would select the “Start Project” button in order to register his waste management initiative.

The first step in registering a project includes an initial project assessment. The “Project Assessment” consists of several questions that help ALL PPL understand the scope of Abu’s project (Screens 03-07). In a user friendly format, the questionnaire takes less than 2 minutes to complete and answers can be inputted by selecting icons, submitting pictures, and writing brief text. The format the assessment takes is significant, because it allows ALL PPL to capture as much data as possible without requiring the user to submit extensive text. ALL PPL estimates users do not want to spend long periods of time filling out a questionnaire, and/or the population may have limited literacy; Therefore, a quick and visually-dominant

104

PROJECT ASSESSMENT: TYPE

PROJECT ASSESSMENT: DURATION

questionnaire is essential in acquiring the most information as possible. Each answer completed in the assessment becomes an input in backend algorithms to determine the recommended project resources and market/user trends.

project sector may also vary based on the market.

When starting the Project Assessment, Abu is presented with four preloaded options for the project type (Screen 03). Based on findings in Ghana from the ALL PPL Impact Methodology. ALL PPL predicts that “Waste” may be the most common project type selected in community projects facilitated on the app. These four projects options may vary from market to market, and the data that is necessary to run the algorithms for each

Once Abu has selected his project type, he can select a date range and time for when he would want to execute the waste project (Screen 04). After setting the duration of the project execution, Abu then selects the location of his project (Screen 05). Based on location services on the app, a map showing Abu’s general area will appear. Abu is able to manipulate the map to show the level of detail he prefers in order to locate his project. Once he has determined the project location, Abu can drop a pin on the map. The pin feature registers the geolocation of the planned project site. 105

PROJECT ASSESSMENT: LOCATION

PROJECT ASSESSMENT: PHOTOS

Combining data retrieved in the “Type”, “Duration”, and “Location” portion of the Project Assessment, ALL PPL uses a series of algorithms to determine the type and quantity of commodities needed to complete the project, how many hours of labor is necessary to accomplish the task, and other resources that can be used to compensate project participants for their labor. Revisiting the algorithm exampled previously in this Chapter, the algorithm receives a series of inputs from a variety of sources, especially those inputted through Abu’s Assessment. In addition computing data to determine the project registry, the backend function of the app also collects, analyzes, and progressively updates data.

Since the data captured does not focus on the micro level, user’s security would not be compromised. At a macro scale, the data collected by ALL PPL is able to benefit other impact-driven organizations. Data such as transaction type, ratio of successful exchanges, and user activity provide a better understanding of the market and can be made available to social impact organizations.

106

While the data is actively processing in the backend, the user experiences a sleek and simplistic frontend display. Abu is able to complete his assessment by taking a few photos of the existing project location and describing the scope of his project in 140 characters and several

PROJECT ASSESSMENT: DESCRIPTION

PROJECT SUMMARY

hashtags (Screens 06 and 07). Once the assessment has been completed, Abu would be able to view and edit information regarding the project through the “Project Summary” (Screen 08).

qualities incentivize users and businesses to participate. For example, if a business owner is able to advertise their support or sponsor a particular project, it is likely that they would be more inclined to contribute to a project. In Abu’s case, there are a lot of small business owners in Ayawaso East that would want to sponsor projects. Through the app, Abu would be able to encourage his neighbors and local business owners to contribute to his project, and in return he could advertise their business/initiative. The way a user or business could officially contribute to a project would be through the project’s “Registry”.

Once confirmed by the Project Manager and ALL PPL, the “Project Summary” becomes publicized on the app’s project finder (Screens 02 and 12). The publication of the project helps other users search and join projects they are interested in. Because the app contains integrated social media options, such as “share with friends”, users would advertise their projects to their friends within and outside of the ALL PPL app. The project’s interactive and transparent

107

REGISTRY: PROCESSING

REGISTRY: FINALIZATION

Similar to online gift registries, the project Registry is a wishlist of resources that a project would need in order to be completed. The Registry is initially calculated by ALL PPL using the Project Assessment data that was previously described (Screen 09). The autocreation of an initial Registry serves as a recommended list for Project Managers. Therefore, if it is a userâ&#x20AC;&#x2122;s first time initiating a waste management project, the recommended Registry would help equip the new Project Manager with the resource knowledge needed to implement the project. Since Abu is familiar with waste management projects, Abu is able to edit the Registry to fit his specific project needs (Screen 10). The Registry is divide into two sections;

Equipment and Compensation. These two categories help the Project Manager and contributors know what supplies are necessary to complete the project versus what would be recommended to compensate those who worked on the project. Once the Registry is confirmed by the Project Manager, the Project becomes open to contributions (Screen 11).

108

Similar to Kickstarter, the Registry would be available for a range of time until the project is able to fundraise most of its necessary materials. Depending on the project, Registries can be open for 1-3 weeks. While the Registry is open, ALL PPL promotes the project by notifying users that live within close proximity of the

Pr oject Mana ger

REGISTRY

SUPPLIES

COMPENSATION

Pr oject Contributor

FIGURE 26- Community Project Registry Source: N.Sobers

project. ALL PPL is also able to promote the project to users who may seem like a good match for the initiative. Users that share similar interests, mutual friends, and account history with the Project Manager, project contributors or project profile, would be targeted for project advertisements. As users join the project and contribute to the Registry, the Project Manager would have tools to view the status of the project and keep track of the contributions. In Abu’s case, when he completes his Project Assessment, he will receive a preliminary Registry for his waste sanitation initiative. After editing the Registry to fit his specific

project needs, the Registry and Project become live. Other users are only able to contribute items that have been officially listed on the Registry. The “Equipment” section of Abu’s Registry would include shovels, gloves, trashbags, money, and related waste pickup materials. Whereas, the “Compensation” section of the Registry would take into account what project participants would find to be fair compensation for their labor. Such items would include money, food, water, mobile money, etc. Once someone contributes to the Registry, they are making a promise to deliver their claimed labor or resource to the project implementation. This promise is recorded through smart contract that is confirmed using the 109

PROJECT CONFIRMATION

FIND PROJECT

specialized QR code. If a contributor fails to bring their promised resource to the project implementation, then Abu would report the incident and ALL PPL would penalize the contributor. However, since ALL PPL is a social trust platform that is enhancing the way that users, such as Abu, have already successfully received contributions through informal means, ALL PPL anticipates that contributors would not break their smart contract. The benefit of Abu using the Registry is to officially record, manage, and formalize the way he receives local help in implementing his waste management project. During the duration of the project, Abu would have access to messaging and project management features that would

allow him to communicate and organize his virtual team. The way Abu would be able to build his team would be individual users choosing to opt into his waste management project.

110

The way a prospective project contributor can join a project would be through the “Find Project’ feature of the app (Screen 12). The user is able to adjust the project search based on geolocation, project type, and trending filters. In addition to the user have the freedom to select which projects they are interested in, ALL PPL’s matching algorithms are able to suggest users to join projects that the user’s friends may be interested in, beneficial skills that the user may possess,

PROJECT DETAILS

CONTRIBUTOR OPT-IN

and forms of compensation the user may prefer.

to sponsor aspects of the project. Users have the option to publicize their registry contribution(s) or to keep it private (which means that only the contributor and the Project Manager would know the source of the contribution). Overall, publicizing a user’s contribution is a marketing tool to give the Project Manager leverage for convincing users to contribute to their specific project.

Once a user selects a project that interests them, they are able to view the project’s details and registry (Screen 13). If a user would like to participate in the project and selects how they would like to contribute (either through commodities or labor), the user can opt-into the project (Screen 14). Once a user opts into the project, the Project Manager will receive a notification. As more users opt into the project, the Project Manager would be able to directly communicate with the contributors through a messaging feature on the app. Contributing users may also include local businesses who may want

On the backend, ALL PPL is able to distribute the commodities to compensate for the contributed labor. For example, if a user signs up for working 3 hours out of 10 total hours needed to complete Abu’s project, ALL PPL’s algorithms would allocate 30% of the total “Compensation” 111

PROJECT ASSESSMENT: TIME

PROJECT ASSESSMENT: LOCATION

submitted in the registry. Although there if full transparency about what the registry contains, the redistribution of registry resources is only released to the Project Manager and the specific user. When a user opts into a project, a special QR code will be generated (Screen 15). The purpose of the QR code is to make a transaction bounded by a contract; in this case, a smart contract. If a user joins Abu’s project and promises to contribute 3 hours of labor in return of 30% of the total compensation on the registry, then a QR code, which links to the encrypted contract would be stored on the ALL PPL database. In order to make the contract binding, Abu and the contributing user

have to meet each other in person in order to scan each other’s unique contract QR code. From the user’s perspective, Abu and the contributing user would see a summary of what was promised in the transaction, a QR code, and a QR code scanner. On the backend, ALL PPL will store the smart contracts into a cloud databased that becomes private ALL PPL data. By having the contract dependent on in-person interaction, it assures that Abu and the contributor know and are able to trust and work with each other. Interaction and trust are essential tools that build community and ensure that the project team is able to work together to successfully complete a project. If the QR codes are not scanned then the contract

112

project that there is an availability open for contributing to the project.

PROJECT ASSESSMENT: DESCRIPTION will be broken. For example, if a contributor opts into Abu’s project, Abu and the contributor can arrange to meet before or during the project commencement to review their contract and confirm their commitment by scanning their QR codes. If the contributor fails to scan the QR code with Abu, then the contributor no longer is able to receive the compensation promised after the completion of the project. From the project management perspective, Abu has tools on the app he can use to communicate with the contributor and confirm the contributors attendance of the project. In case the contributor does not show up during the implementation of the project, then ALL PPL would be able notify other users interested in the

After the completion of the project, contributors would receive compensation and a feedback survey. If contributors show up to help Abu implement their project, Abu can confirm their attendance by submitting photos and scanning QR codes of the contributors. If a contributor was promised water, jollof rice, and GH¢ 15 contributing their labor, the contributor could will receive in-person compensation at the end of their shift. After the compensation has been dispersed, the contributor and the project manager would receive a brief survey to provide additional information about the exchange. The survey enables ALL PPL to collect data on the implementation and success rate of community projects, as well as the quality of the exchange. If Abu reports that the contributor was unpleasant or if the contributor reports anything negative about interacting with Abu and his project, then these reports factor into the overall user’s score. Conversely, if a contributor or Abu provides positive feedback in the survey, then the evaluated user’s profile score will increase.

FEATURE: PEER LENDING Meet Akua, Akua is in need of cash and does is not able to work on a community project or have access to a loan. Akua has asked her family for money several times and does not wish to go through the shame of having to ask her friends for money. Akua uses ALL PPL. 113

process overview_

PEER LENDING 1

LOAN INITIATION A user is able to request a loan by completing an interactive loan questionnaire. Through the questionnaire the user is able establish loan settings such as amount, duration, and interest. A user who would like to lend money can submit a similar questionnaire in order to establish the range of loans they are interested in giving.

LOAN MATCH A borrower is able to match with a potential lender by swiping left (dislike), right (like), or starring (save) lender profiles. A lender profile would include the loan amount, duration, interest, and shared characteristics between the lender and borrower (For example, number of mutual social media friends, geographic distance, similar activity feed). Once a borrower swipes right, then the lender would be notified of the match. Once the lender approves of the inquiry, the borrower and lender would be matched.

LOAN NEGOTIATION Using an interactive messaging system, the borrower and lender would be to communicate regarding the terms and conditions of the loan. The borrower and lender would be able to submit edits of the loan amount, duration, and interest. If the borrower or lender are unable to understand certain aspects of the loan, they are able to refer to the in-app financial literacy tool. Once the borrower and lender agree to the loan conditions, a smart contract is established and the loan commences.

CHECK-IN NOTIFICATION 60% of the duration of the loan, ALL PPL would send a notification to the borrower to check on if the borrower is still on track to complete the loan transaction on time. If the borrower is unable to complete the original loan terms, they would have one opportunity to renegotiate the loan terms with the lender.

PAYMENT COMPLETION If the borrower successfully completes the loan, the borrower and Peer Circle are rewarded and receive positive profile scores. If the loan defaults, the Peer Circle has to repay the loan and the borrowerâ&#x20AC;&#x2122;s account is on hold until the Peer Circle has been repayed. If the borrower continues to default the Peer Circle could remove the borrower from their circle, the borrower would receive a low profile score, and/or ALL PPL would suspend the user.

114

FIGURE 27- ALL PPL Peer Lending Overview Source: N.Sobers

115

LOAN INITIATION

LOAN PREFERENCES: BORROWING

Once Akua’s profile is set up, Akua access the all ppl that delivers tailored solutions to her needs. Our research has showed that the median daily expenditure is about GH¢ 100 to 150 per day. ALL PPL caps the maximum amount of loans available on the app to match the borrowers reported income level.

Akua depending on her needs then chooses if she wants to be a borrower or a Lender. Akua determines that she would like to borrow GH¢ 70 ( Screen 2). ALL PPL’S aim is to allow users to access small amount of capital , not to pay utilities or rent but just to be able to “get by”. The field study revealed that our users reported needing capital to buy food when they have low sales or when they need to buy more produce to sell. They also need capital to purchase small consumption goods like data for the mobile data plan

Our focus groups revealed a preference to lending and borrowing to friends and family. ALL PPL allows its users to formalize these exchanges amongst friends and family. Users also determined that often their current lending pool was overextended and having access to capital quickly would be a great advantage. 116

Identity is a key ALL PPL service. ALL the traditional financial challenges conception of

feature of the PPL redefines landscape and identity in P2P

LOAN SEARCH

LOAN MATCH

networks. Users choose whether they want to reveal their identity in the first process of the app. The field research has revealed that users value secrecy and do not wish for neighbors and friend to know when they have financial burdens especially in small communities. When looking at platform like Kiva, that requires their users to share personal information and spending plans for loans, ALL PPL believes that users do not need to â&#x20AC;&#x153;sellâ&#x20AC;? their story to get access capital. Also, ALL PPL wants to empower their users and allow the freedom to chose to create their own identity. Like social media, ALL PPL allows for interpretations and understanding of self.

Akua can swipe through the features of the app and determine whether lenders are a good match for her spending behavior. During this steps lenders and borrowers have the option to negotiate and secure the terms of their loan. Akua can send message to different lenders and find out more. Once this transaction is complete Akua and her peers get a notification telling them: 1. The expected repayment schedule 2. The terms of the loan 3. The expected benefits from the loan Akua can now access a data dictionary that explains more about 117

LOAN MATCH CONFIRMATION

LOAN PREFERENCES: LENDING

ALL PPL wants to simplify concepts related to finance. Often, the users that we interviewed clearly expressed a strong understanding of budget management and financial projection, however this knowledge doesnâ&#x20AC;&#x2122;t translate in traditional lending spaces which limits their access to loans. KYC policies have different ways of measuring financial literacy. The ALL PPL dictionary is not trying to educate users on concepts they understand but rather would like to translate these concepts to day to day financial transactions.

system for her investment, Akua can be lender. Akua determines the amount she is willing to lend and at which interest rate. As described in Screen 6, Akua choses a range of capital to lend and is connected to all users willing to borrow any amount in the determined range. Akua is then connected to a user who will have similar interest and will also have a need for cash. Akua can determine her prefer repayment period and the amount she will be repaid. In the back end the all ppl app uses smart contracts to determine and secure the terms agreed in the contract. ALL PPL wants lenders to feel secured and help lenders make informed decisions when

Akua can also be a Lender on the ALL PPL exchange platform. In the case where she would like to make some cash and would like to use a traceable and sure 118

LOAN MATCH REQUEST

LOAN TERMS

determining interest rates to offer. Lenders on the ALL PPL app are aware of the borrowers score and how well they are vetted by their peer circle. While swiping for preferences, Akua can communicate with the borrower and the borrowers circle. Being a lender, however involves risk and ALL PPL will guarantee that lenders are aware by providing a range of interest rate for the borrower to choose from. The higher the risk, the higher interest rate the lender will be tempted to offer. Market rate and competition will also influence the likelihood for a lender to find a borrower. ALL PPL will let lender know

if the interest rate offered is competitive. Once borrower and lender reach an agreement, the agreement is secured in a smart contract. In the back end, smart contract allow for contract terms to be automatically executed with an "if/then" condition statement. If Akua agrees to the terms determined for her loan, she will then see her mobile money account debited or bank account debited. When the loan reached full term, Akua receives a notification to tell her that her loan was successfully repaid. Akua also has the choice to collect her funds at a mobile money booth. In that case, Akua shows a confirmation QR code to the mobile money provider to confirm her loan repayment, 119

SUCCESSFUL TRANSACTION

FIGURE 28- ALL PPL Peer Circle Source: A. Verella

FAULTY TRANSACTION

In case of loan defaults, users have the possibility to negotiate the terms of the loans. Lenders can accept to renegotiate terms with the borrower. The negotiation process is lengthy and involves the borrower but also the peer circle that has acted as guaranteers to the loan. When all the parties involved in the loan agree on terms a new repayment schedule is launched. This added layer of security guarantees that if there is no collusion on the app, it is possible to protect the lender through crowdsourced deposits. It is important to understand the importance of crowdsourcing in creating a incentive for lenders to repay. If after the negotiation period the loan is not repaid. The peer circle will pay back the loan by 120

the amount they had insured the borrower. For example, if Peer 1 had insured a GH¢ 100 loan at 50%, if the borrower does not repay the loan, Peer 1 will have to pay back GH¢ 50. This system also works as a reward system for the peer circle. For example, if Akua gives out a GH¢ 100 loan at 20% interest rate she will expect to receive GH¢ 18 in return. ALL PPL collects 5% of the interest rate and redistributes 5% to the peer circle. Peer1 in this example would receive 50% of the 5% redistributed interest so, GH¢ 0.5. Whether is to pay for a defaulted loan or collect interest, the transaction and management is automated thanks to smart contracts. ALL PPL provides a platform to

LOAN NEGOTIATION

LOAN CONFIRMATION

exchange and connect. Like social media, users can share, rate and determine preferences. The negotiation feature as mentioned, allows for empowerment. At ALL PPL, we understand the importance of having room for a “rainy day” and giver our borrowers room to negotiate while guaranteeing security for the lender. Once Akua is repaid she can choose the following options :

Since Akua can be a borrower, a Lender, or a guarantor, having an ALL PPL credit gives her the opportunity to be active or have the platform manage her funds for her. The borrower and the peer circle are notified before the loan is due. This additional check in is a safe guard for lenders and guarantors.

1, Cash out at Mobile Money booth 2. Have funds wired to a account 3. Credit the ALL PPL Account Through the ALL PPL account, users can used stored credit on the app to be applied towards future transactions.

Our research on the ground has shed light on the difficulty in accessing small amounts of capital. Practices of predatory lending are present and users are taking out loans to repay loan. The ALL PPL unlike most financial lending institutions doesn’t have Insurance sold with the loan, Precomputed interest, origination fee or Prepayment penalties. 121

CHECK-IN NOTIFICATION

LOAN EDIT CONFIRMATION

Users of the ALL PPL app establish a repayment schedule and can revisit the terms of the loan. At the end of all transactions, successful or not, users have a score that helps strengthen the ALL PPL matching algorithm. Trust is establish through repeated transactions. Accountability and rewards makes ALL PPL a secure financial management tool.

many financial institutions do not provide flexibility in accessing small amounts of capital, those living at the margins have a limited and over-extended financial network, consisting of financially secure family and friends.

ALL PPL allows users to access capital in two ways; through small crowdsourced loans and through small jobs. The ALL PPL platform aims to reduce financial vulnerability in emerging markets. As we defined in the previous chapters, small loans are often unavailable due to predatory lending practices. Since 122

Loans carry expensive interest rates along with collateral requirements that often exclude those living in precocity. Those living at margins do not meet the requirement set by financial institutions and cannot afford to wait. There is a need for more risk sharing and transparency in lending in order to redefine barriers to entry. ALL PPL allows the unbanked to highlight financial reliability and capacity to budget while repaying their debt.

Our vision challenges the current view on risk sharing and financial markets in developing countries while providing security and opportunity to those in need. ALL PPL is designed to mitigate risk and will benefit its members using several techniques, such as distribution of a loan to an individual borrower and using multiple lenders on a single loan. We will also mitigate risk for our lending members by leveraging members to vet the borrower. Since ALL PPL provides a social platform for lenders and borrowers to connect, ALL PPL will use the same BLOCKCHAIN connection tools to help with community 23 Nakamoto, S. (2008) Bitcoin: A Peer-to-Peer Electronic Cash System. https://bitcoin.org/ organizing. Community organization is bitcoin.pdf key the survival ofEthereum social cohesion 24 for“Ethereum Project.” Project, www.ethereum.org/. and help protect communities from 25 to De Filippi, Primavera. “No Blockchain Is an Island.” CoinDesk, CoinDesk, 1 Mar. 2018, www.coindesk.com/no-blockchain-island/.De Filippi, Primavera. “No Blockchain Is displacement and gentrification. To an Island.” CoinDesk, CoinDesk, 1 Mar. 2018, www.coindesk.com/no-block strengthen the critical role of community chain-island/. agency, PPL allows“No forBlockchain neighbors 26 DeALL Filippi, Primavera. Is an Island.” CoinDesk, CoinDesk, 1 Mar. 2018, to reconnectwww.coindesk.com/no-blockchain-island/.De and work together to Filippi, Primavera. “No Blockchain Is an Island.” CoinDesk, CoinDesk, 1 Mar. 2018, www.coindesk.com/no-block implement a community project. ALL PPL chain-island/. aims to solve a difficult issue: addressing 27 Namara, Suleiman. “Can Ghana's Extreme Poor Be Graduated?” Governance for Develop access to capital and2018, exchange in ment, 3 May blogs.worldbank.org/jobs/can-ghana-s-extreme-poor-begraduated. developing countries where access, social and financial values, and collateral are different.

ALL PPL 50 51

Kapp, Karl M. The Gamification of Learning and Instruction: Game-Based Methods and Strategies for Training and Education. John Wiley & Sons, 2012. Harvey, Jenny. "Participatory Action Research as a Theory of Practice for Planners." Co Lab Radio, MIT CoLab, Nov. 2016. Accessed 23 May 2018. 123

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06 CONCLUSION

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126

The story of Ayawaso East is a universal narrative of how a lack of access can perpetuate cyclical poverty. It is also a story of how technology and community networks are essential in filling in institutional voids. By studying the patterns of how vulnerable communities are using tools, such as mobile money and social media, to improve their quality of life, it was important for us to capitalize on these natural behaviors and develop a new tool that could make people connect, organize, and exchange easier. It is through ALL PPL that users would be able to integrate their existing patterns of resilience into an all-inclusive mobile app experience. Because we identified that the marginalization of certain communities was perpetuated by institutional voids, particularly a lack of access to capital, it was important that we developed a tool that could help such communities finally gain access to money in a nonpredatory way. As a Peer to Peer (P2P) exchange platform, ALL PPL allows for users to access capital in two ways; small loans with “Peer Lending” and quick jobs through “Community Projects”. In addition to ALL PPL incorporating tools that existing marginalized communities already use, ALL PPL introduces smart contracts as a novel feature in legitimizing transactions on the platform. By utilizing smart contracts and existing community networks, ALL PPL uses technology to promote transparency and exchange in community empowerment. Ultimately, ALL PPL does not create a new system to

help communities at the margins, instead ALL PPL uses technology to help making existing acts of community resilience much easier. When exploring Ghana as an initial market for ALL PPL, we were interested in working with the market’s most vulnerable communities first. In addition to specifying our target market and pilot users, we incorporated urban planning methodology into our business development and market strategy. Dedicated to understanding context, embedding ourselves within a community, and customizing our product to the unique circumstances of our markets, we have utilized data analysis, community engagement, and co-creation as essential tools in order to ensure that ALL PPL is able to help the users its intended for. Although we are interested in launching ALL PPL in Ghana, we would also like to help more communities around the world. Trends of institutional voids limiting economic mobility and quality of life is not a story unique to Ghana. We have found these trends to be prevalent all over the world, especially in emerging economies. While trends of financial exclusion correlate with individuals using mobile money and community networks as a tools to overcome such challenges, we have found that ALL PPL would be a feasible global product. Figure 29 provides an overview of market potential and growth in Africa and the rest of the world. Based on these projections, ALL PPL anticipates global success. In order to scale, we have to make sure that we have 127

REGIONAL GROWTH IN 2017 Number of deployments

GLOBAL

As of December

Registered accounts

Active 90day accounts

Transaction volume

Value USD

553.7m

191m

1.5bn

26bn

24.6

29.3

24.8

21.3

690m

247m

1.8bn

31.5bn

33.3m

5.5m

28m

1.8bn

9.3

29.7

5.1

6.5

36.5m

7.2m

29.5m

1.9bn

19.7m

10.1m

59.3m

0.8bn

9.3

14.3

11.3

6.4

2017

21.5m

11.5m

66.1m

0.8bn

2016

159.9m

55.5m

347.8m

5.7bn

46.9

55.7

48.9

234.8m

86.3m

518.1m

8.4bn

44.7mn

15.3mn

31.8mn

0.3bn

5.7

19.8

21.5

47.2m

18.3m

38.1m

0.4bn

2016

276*

Year-on-year growth, %

2017

EAST ASIA AND PACIFIC

2016

Year-on-year growth, %

2017

LATIN AMERICA AND THE CARIBBEAN

2016

SOUTH ASIA 40

Year-on-year growth, %

2017

MIDDLE EAST AND NORTH AFRICA

2016

Year-on-year growth, %

128 FIGURE 29- Informality as a Response Source: GSMA

2017

SUB-SAHARAN AFRICA SNAPSHOT Number of deployments

WHOLE REGION

As of December

2016

135

Year-on-year growth, %

2017

EASTERN AFRICA

2016

Year-on-year growth, %

2017

CENTRAL AFRICA

2016

Year-on-year growth, %

2017

SOUTHERN AFRICA

Registered accounts

Active 90day accounts

Transaction volume

Value USD

285.9m

103.1m

981.3m

17.4bn

18.4

18.2

17.9

14.4

338.4m

121.9m

1.2bn

19.9bn

168.2m

65.6m

773.9m

11.9bn

13.6

11.6

12.5

10.5

191.0m

73.2m

870.8m

13.2bn

23.6m

5.9m

33.5m

742.1m

39.8

64.1

88.3

72.6

32.9m

9.8m

63.2m

1.3bn

2016

7.7m

2.2m

8.7m

104.7m

Year-on-year growth, %

29.4

20.1

20.9

17.9

10.0m

2.7m

10.5m

123.4m

86.4m

29.4m

165.2m

4.6bn

20.9

23.5

28.3

15.2 129

104.5m

36.2m

211.9m

5.3bn

2017

WESTERN AFRICA

2016

Year-on-year growth, %

2017

customized our product and partnerships. Our work wanted to look at the nexus between informality and technology. Financial inclusion is lacking and poverty is prevalent in most areas of the world. While the amount of capital and wealth keeps growing inequality is on the rise. Financial institutions were intended to create a market equilibrium and act as an intermediary to bridge the gap of access to capital. Based on a social contract of promises, capitalism is failing and a significant portion of the worldâ&#x20AC;&#x2122;s population lives in extreme poverty. While there has been an effort with Microfinance to include the marginalized, the burden is too vast and the needs of the unbanked have not been met. Access to technology creates empowerment. The growing use of mobile technology has created a more connected world. The culprit of financial exclusion is excessive cost of intermediation, and to increase financial inclusion there must be a decrease in intermediation to reduce cost; however, blockchain technology allows for users to be in control of the assets that they share and brings back hope for market equilibrium. There is a supply and demand for capital, and blockchain is a tool to connect this demand and supply; a transparent market place where goods can be exchanged. The problems observed in Ayawaso East depict a reality observed worldwide, a fight for a voice in a system of oppression. Due to institutional voids, 130

communities have to self-organize. Our field study shows the intricate realities and challenges of organizing, building trust and exchanging within an underserviced community without adequate access to capital. This research and proof of concept has brought us to think about the decreasing role of institutions and the increasing influence of technology. When there are systemic changes in the methods through which our societies interact, there is a self-regulating process that forces society as a whole to adapt. Analogously, blockchain is forcing regulators to rethink the precedents and terms in exchange; what technology will address the problems faced by those financially excluded; can technology fill these institutional voids. Overall, what are the roles that the practice of urban planning can have in the future of smart informal cities?

131

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