How blockchain can enable economic inclusion of refugees


How blockchain can enable economic inclusion of refugees
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Jessica Camus is Head of Partnerships and Impact at Diginex. Chris Hambarsoomian is Senior Associate, Government Solutions at Diginex 

With approximately one person every two seconds forcibly displaced as a result of conflict, we are witnessing the highest levels of displacement on record according to the United Nation’s High Commissioner for Refugees (UNHCR). Nearly half of all refugees under the UNHCR’s mandate are estimated to have been in exile for at least five years, with many forcibly displaced for more than two decades. Due to the difficult circumstances under which refugees are forced to flee, identity documents are often lost, destroyed or stolen. Refugees may sometimes even decide to travel without any documentation to guard against potential persecution.

Refugees may, especially at the outset of their displacement, lack the identification documents required to pass Know-Your-Customer (KYC) criteria, putting them at increased risk of social exclusion, poverty and exploitation. Furthermore, a lack of educational and professional credentials can make it difficult for refugees to find a job and start the process of socioeconomic inclusion in their host countries.

The Syrian refugee paradox

The challenge becomes apparent when considering real-life scenarios. The world’s largest refugee population is currently from Syria. According to a study conducted by Deloitte and the University of Oxford’s Refugee Studies Centre, the economic lives of Syrian refugees in Europe are characterised by a paradox:  Many are highly educated (38 per cent have a university education) yet unemployment among them is disproportionately high at 82 per cent. Of those unemployed, nearly all rely on government support. And though 97 per cent of refugees own a smartphone, only 30 per cent have used an app to find a job. It is interesting to note that many refugees have concerns about seeking employment in sectors that do not relate directly to their existing skills and qualifications. On the other hand, businesses appear interested in employing refugees and there are examples of positive experiences. However, many businesses have misconceptions about refugees or lack information relating to their potential as prospective employees according to the study.

For Syrian and other refugees travelling to Europe, emerging blockchain-based solutions can play a vital role in facilitating labour recruitment and data exchange of jobseekers in a trusted and secure manner, enabling refugees to find a job or start a business. A digital economic identity application can, for instance, allow for reliable portability of academic and employment records to be integrated into platforms such as UNHCR’s Population Registration and Identity Management EcoSystem (PRIMES).

Benefits of a digital economic identity solution

In contrast to a traditional centralised solution, decentralised blockchain infrastructure can ensure trust, transparency and security between stakeholders. Since data are not held or managed by a central party, individuals can have confidence that their digital identities are not being viewed or altered without their authorisation.

When an individual’s digital economic identity is viewed or edited, a timestamped record is created that links the person who interacted with the data profile. This immutable log improves auditability and transparency of the various stakeholders interacting with refugee identities.

This functionality is enhanced through a data-permission system, where individuals can control if, when and how their data is viewed by other parties. Data can be shared on a hidden and/or anonymised basis, reducing the repeated recording of data by multiple parties.

Throughout the development and deployment of blockchain solutions for data integrity concerns in the human rights context, we have identified the following functions as the most promising for economic empowerment of refugees:

a) Making skills qualifications portable

Portable skills qualifications allows refugees to prove job-fit for stakeholders supporting their economic integration, as well as helping to easily identify training needs. According to the World Economic Forum’s research, comparability of qualifications remains unclear due to a lack of broad standards. The principles of portability and inter-operability of skills certifications are required across different granting institutions, bodies and economies. Logging existing paper qualification documents on a blockchain enables refugees to have a portable, secure and safely stored version of their qualifications throughout their journey. Storing information skills certifications on a blockchain can help refugees to validate skills required and competencies they possess, which will in turn increase mobility between labour markets. In response, the public sector and businesses can develop more effective and agile training programmes and certifications on an ongoing basis to refugee workers.

b) Enabling financing for starting a business

A digital identity tool can also be used for refugees to gain access to financial services. An effective digital payment program enables refugees to access money on demand without special restrictions. Through a blockchain-based economic identity, payments can be made to individuals through a secure network. The user experience looks similar to existing digital platforms, such as mobile money or online banking. However, a blockchain-based solution would have the added benefit of enhanced auditability, as the movement of funds are traceable directly to recipients.

Various stakeholders have expressed to Diginex increasing interest in donation/microlending transparency, as they would be more inclined to fund programmes run by organisations like the UNHCR if there were a greater level of assurance that funds were having their desired impact. Moreover, this transparency is valuable for ensuring anti-money laundering and counter terrorism financing compliance for regulators and financial institutions. For refugees, the added benefits include sharing authenticated information about themselves, their businesses, training records and loan repayment information in an efficient and secure manner.

c) Storing employment information 

Refugees play a significant role in the informal economy of their host countries; yet without formal employment contracts, they are especially prone to exploitation without means of recourse. They have little way of proving their work experience to potential employers or governments of subsequent host countries, reducing their employability and mobility.

Together with The Mekong Club, an anti-slavery non-governmental organisation (NGO), Diginex developed eMin to protect migrant workers from workplace exploitation. At its core, eMin is a digital economic identity solution that focuses on employment information. eMin addresses this problem by providing an immutable record of employment contracts and any other informal professional arrangements, while also providing permanent access to refugee records and an ability to add metadata on working conditions.

This data can also be shared securely with trusted parties such as the UNHCR, supporting NGOs, potential employers and governments. Data on informal employment can prove invaluable at the point of resettlement, as governments may be more inclined to accept or even attract populations with specific employment track records who can demonstrate the ability to contribute to the local workforce. Potential employers can demonstrate contractual adherence by making payments to refugees on the digital platform. This would link to salary terms within the employment contract or mutually approved metadata to prove legitimacy and, for refugees, prove receipt of regular income streams valuable for accessing other public and private sector services.

Data liquidity and ownership

Blockchain technology has the potential to significantly increase the functionality of a digital economic identity solution by improving the quality and quantity of data available. It also enables the sharing of data between stakeholders in the refugee ecosystem without compromising the safety, security and privacy of individuals. A well-implemented solution can allow refugees to own and control their data to be able to utilise opportunities for social and financial inclusion in their host countries.


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