A recent report by the World Health Organization and the World bank estimates that the pandemic pushed more than 500 Million people into extreme poverty globally as they paid for health costs out of their own pockets. Despite the crisis reversing the recent global poverty reduction, it accelerated financial inclusion via mobile financial tools provided by crypto, blockchain and FinTech startups.
The world bank defines extreme poverty as living on less than $1.90 a day, which is about 9.4% of the world’s population as of 2020.
When the pandemic broke out, most countries across the world applied lockdowns which decreased incomes and employment opportunities, causing an increase in extreme poverty.
“In order to reverse this serious setback to development progress and poverty reduction, countries will need to prepare for a different economy post-COVID, by allowing capital, labor, skills, and innovation to move into new businesses and sectors.” says World Bank Group President David Malpass.
Sub-Saharan Africa has the world’s youngest and fastest-growing youth population and the youth between the ages of 15 and 24 are expected to double to 400 million by 2045. In Kenya alone, 68% of the total population is below the age of 35. But the formal economy is not meeting job demand and today’s global crises are further exacerbating unemployment.
At a recent panel discussion by the Africa Tech Summit in Nairobi, panelists agreed that blockchain-based digital identity can unlock many barriers faced by the poor, as well as facilitate greater economic growth through ease of transactions.
“Once a person has an identity, they can potentially have access to a range of financial services” noted Angelo Paolo Kalaw, Partner, Research and Innovation at Celo.
Hatel Patel, Head of Venture Growth for Mercy Corps Ventures gave a real-world example where in 2021, Mercy Corps Ventures MCV ran a pilot with Celo Foundation and other partners to test cross-border stablecoin micropayments for Kenyan youth completing digital microwork. You can read the findings from the pilot here.
Digital microwork is a form of digital work that breaks up complex technical projects into thousands of fractional tasks which can be completed in minutes via a smartphone. With the significant rise in mobile internet adoption, digital microwork can unlock income new income opportunities and increase savings among the unemployed youth.
“The good news is that digital labor can be completed in the home, within flexible hours, making it highly compatible with the demands on women’s time. Previously, structural barriers prevented women from engaging in other parts of the gig economy and blockchain and crypto represents an exciting opportunity.” noted Hatel Patel.
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