How people can safely secure land property via in a risky environment

In Ghana there are a host of problems involved with attempting to secure property. The slow bureaucratic process of registering your property – two years on average – can see someone unexpectedly claiming your land before you do. Sometimes land already owned by someone can be sold off by another person, and multiple people can be under the impression simultaneously that they own a piece of land. Some Ghanians attempt to deal with this situation by physically creating “Land not for sale” signs, in an attempt to clarify their rights to a property. This kind of persistent insecurity greatly contributes the economic instability of a place.

But  a new and unprecedented technology is now offering people a far more secure way to access and secure land: Blockchain technology. Already known for supporting the Cryptocurrency ‘Bitcoin’, The Blockchain records transactions via a distributed database, and copies them to a participating network of computers (called “Nodes”). Since the information is disseminated across multiple computers using sophisticated cryptography, it can only be viewed or edited by those with access rights to the network (a permissioned Blockchain).

By using this technology to securely designate land ownership and rights, a far more secure system can be put in place, that is of crucial benefit to people, government and financial institutions.

“The market of unregistered land, that is, land with disputed title, is estimated at 8 billions of dollars in Ghana, but it is probably a lot more” says Philip Jarman, Chief Commercial Officer at BenBen, a new Ghanaian start-up focused on providing Ghana with a digital data platform secured by blockchain technology.

The Land & Property Commission in Ghana is dictated by antiquated laws and processes, which slows down the pace of the country’s business development. We know that property ownership has a direct impact on poverty reduction. But this is being impeded – the fact that families are unable to pass assets to their children, or extract assets makes it difficult to build a stable future for new generations.

BenBen’s founders have various stories that demonstrate the detrimental effects of a dysfunctional land registration system. A typical case involves an individual who had his mortgage authorised.  But by the time it had been approved, his business had gone into administration.  Had he been issued his mortgage in time, he would have been able to successfully finance his business. Stories like this abound.

Another issue, directly linked to corruption: It takes two years to register a property from the centralised ledger (The Ghana Lands Commission). This means an individual can technically sell the same property multiple times. Such systemic problems can create wicked problems that the government struggles to manage on an ongoing basis. Moreover the government is unable to verify tax on property due to its paper-based mechanisms. Declaring your land as residential rather than commercial lowers property taxes from 15% to 8%. For the government, this represents lost revenue that could have been used productively elsewhere.

BenBen has understood this issue and wants to enhance property ownership by eliminating complicated administrative paperwork.

They are securing citizens’ land properties via the blockchain – having registered already more than 5,000 properties in Accra – and have access to more than 500,000 ‘shapefiles’, or outlines of property. Citizens can obtain an ID linked to their property. This is registered on the blockchain and secured from corruption thanks to its distributed structure. With this ID, quick online updates can be made by property owners.

The system is extremely efficient for all stakeholders: The government gains a substantial, self-organising database with which to monitor the situation. Getting rid of paperwork and using a digital land property platform reduces government’s spending, allows new income and helps increase transparency.

On the financial side, banks are required to assess an individual’s capability to repay a debt, and that depends on the quantity of data a citizen can provide on his or her financial and personal situation. 

Barclays, a bank present in Ghana, claims that 70% of their mortgage portfolio consists of unregistered properties – Unable to secure house property titles, banks cannot secure this asset and gain liquidity from it.

This database provides valid and current information on the potential landlord, and allow mortgages to be issued quickly and easily. This points to an important aspect of blockchain technology. It can create trust in a network: The distributed structure offers financial institutions issuing loans the opportunity to swap documentation without the delay of third party approval from a Centralised registry. It is made official and secure by a ‘smart contract’ – an automated process which makes a contractual clause unnecessary, with no lawyer required.

Mobile broadband already accounts for the vast majority of internet connections in the country, with data showing 75% mobile penetration. Plans for infrastructure sharing among telecommunication companies display Ghana’s ambitions of lowering network deployment cost, especially in rural and marginalised areas, and enhancing connectivity throughout the country. With the extremely low price of Chinese phones coming into the African market, we can expect most of the population to be connected via 3G/4G in a few years. After the striking success of M-Pesa – small-value electronic payment and store-of-value system accessible from ordinary mobile phones – which allowed millions of citizens throughout Africa to have access to online bank account and money transfer, blockchain technology seems to offer a compelling Ghana’s problem.

BenBen is thinking ahead: the platform, accessible via mobile applications, brings a simple solution to a big problem. Banks are able to check property documentation instantaneously. Citizens, by using the BenBen account, can secure their properties and access loans that secure their businesses for investment purposes.

This leapfrog in property exchange practice allows Ghana and other regions across the world to take full advantage of new technologies and use them in a direct and radical way. Sweden is one of the first countries to also bid on Blockchain for their land registry. Since Sweden already has a complete digital database of properties, their aim in implementing the new system by 2019 is rather to remove legal obstacles.

The of the Blockchain platform, a result of integrating every level of Ghanaian society (financial institutions, the government and citizens), is key. Especially in the public sphere, where responsibility and accountability must be exercised at even the lowest levels, the blockchain fundamentally changes the scope and purpose of existing practice from slow and poor control to efficient and co-creative participation.

We expect to see many more exciting developments in this area, that help to lay the conditions for what we refer to as a Massive Small growth in to occur – one where top down institutions lay the conditions for bottom-up, fine grain and democratic urban development to occur. Each technology or platform that comes into being makes this process more of a reality.

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