Nepal: An opportunity to save millions in fees & rebuild
This Blog post is co-authored by Jay Evans (Medic Mobile) and Connie Gallippi (BitGive).
The BitGive Foundation partnered with Medic Mobile, starting a campaign to raise funds for the organization last November. Medic Mobile has efforts in 21 countries worldwide working to empower health workers through technology. Now with the two devastating earthquakes in Nepal, Medic Mobile’s Nepal-based team is on the ground, unharmed, and working hard with relief efforts. The funds BitGive is raising from the Bitcoin community will go to the Nepal team.
Jay Evans, Medic Mobile’s Regional Director for Asia, is on the ground in Nepal and shares this perspective:
“We are in Nepal and it has been about two weeks since the last major aftershock. Relief aid has made it to many areas and many more are still in need of supplies. One major obstacle to getting families back on their feet again and supplied with what they need is: money. In the case of Nepal this usually means cash. Only 26% of Nepalis have a bank account (World Bank), yet the 2.2 million Nepalis that live abroad send back roughly $5 billion USD every year.[i] So where does all of this money go? Mostly to money transfer agents that can take as much as 5-15% including fees and the losses in exchange conversions.[ii]
At just 5%, this cost collected by the remittance system is $250 million per year, or more than half the amount that the UN humanitarian effort has asked member governments to commit to the recovery efforts here in Nepal.
Wouldn’t it make sense to invest in alternatives to the current remittance system that exists and to improve the efficiencies in transfers? Whether that is via direct remittance systems via mobile or perhaps even systems using Bitcoin, every 1% we save in transaction costs is $50 million in the pockets of the citizens of Nepal in a time of dire need.”
BitGive is looking into ways to use blockchain technology to transfer the funds they have raised and save on transfer time and fees. Services like Unocoin in India and BitPesa in Kenya provide a way to transfer Bitcoin across the world and exchange for local currency on the receiving end. Unfortunately, Nepal does not have a Bitcoin exchange or a mobile payments system to convert Bitcoin, so we are investigating other possibilities.
Relief efforts, remittances, and charitable efforts around the world would greatly benefit from Bitcoin and blockchain technology. The BitGive Foundation is building partnerships with the various exchanges, remittance companies, and mobile payments and wallet applications in the developing world to have a network ready to leverage for more philanthropic and relief efforts moving forward. But those opportunities are few and far between in the current landscape. Bitcoin infrastructure in the developing world, and especially liquidity in the last mile, is lacking and has a long way to go before the technology can be leveraged to truly serve the world’s unbanked and most in need of financial services.
In the case of Nepal, some of the worst hit districts – Dhading, Gorkha and Sindhupalchowk also send large numbers of migrant workers to the Gulf and other countries. Last year Dhading sent 7,817 workers abroad, Gorkha sent 6,436, and Sindhupalchowk sent 8,376.[iii] If the international community were somehow able to reduce overall remittance costs by just 1-2% per year this would push close to $100 million into the villages and communities that need it the most in Nepal.
Nepal and the international community have an opportunity to look at ways to reduce the costs of remittances that the average person in Nepal has to bear and give access to more capital immediately in the communities where the need is greatest. We should look at all alternatives to try and address this challenge now.
You can support BitGive’s campaign for donations for the Medic Mobile Nepal Team or send them a donation on ChangeTip!