Kenyan Government to Use Blockchain to Distribute Affordable Housing

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The Kenyan government plans to leverage blockchain technology for the distribution of new government-funded housing units, according to reports from local news outlet the Star.

The Kenyan National Housing Fund will finance the initiative under the Finance Act 2018, and it plans to create an efficient allocation of the houses to those who need it using the distributed ledger technology.

The State Housing and Urban Development Permanent Secretary Charles Hinga said the Fund expects to raise about Sh55 billion a year (around $545 million) to build “cheaper 500,000 housing units.”

The Star quoted Cabinet Secretary for Transport and Housing James Macharia who spoke during a housing agenda meeting with the World Bank in Nairobi yesterday. He said the nascent technology would be used to distribute housing to deserving applicants in a bid to address past issues concerning “graft fears arising from beneficiaries and even legislators.”

“Kenya will use blockchain technology to ensure the rightful owners live in government-funded housing projects.”

According to Hinga, the ratio of mortgage to rent in the country is 6 to 1 and affordability of the properties remains a problem.

Out of over 2 million Kenyans employed in 2016, only three percent earned over 100,000 Kenyan Shillings (around $992).

Another challenge that could spring up as the government is set to build affordable homes is on the allocation of the properties as Kenyans have lost “trust in what the government does” regarding housing. Previous wasteful spending on expensive capital projects, doesn’t help matters as well, the government official added. Hinga was referring to the National Youth Service scandal I and II, where civil servants, including the Director General of National Youth Service, and other private sector officials were arrested for fraudulent activities that led to the looting of $78 million from government coffers.

Kenya is one of Africa’s leading countries regarding blockchain and cryptocurrency development. Some of the region’s largest blockchain remittances originated from Kenya. Last month, the chairman of the Distributed Ledgers and Artificial Intelligence task force Bitange Ndemo advised the government to tokenize the economy in a bid to tackle corruption and uncertainty in the country.

“We must begin to tokenize the economy by giving incentives to young people to do things which they are paid through tokens that can be converted to Fiat currency,” Ndemo had stated at the time.

Active legislative discussions over blockchain and cryptocurrency related programs show the interest that the Kenyan government has in blockchain technology. This is evident in the government’s effort towards finding proper regulatory frameworks for the technology over time. In August 2018, the country’s electoral commision even showed signs of adopting blockchain technology in voting processes.

Speaking to the BBC in May, Information Minister Joseph Mucheru confirmed that the country is looking into deploying blockchain technology in the country’s land registry.

Under the framework, Kenya’s notoriously porous land registry database will be recorded on a blockchain, effectively making it impervious to fraudulent changes that corrupt officials currently effect in exchange for a bribe.

Featured image from Shutterstock.

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POSTED IN: Blockchain News, News, Regulation
Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.