Phillip Jarman, the UK Director and Chief Commercial Officer of a blockchain company BenBen speaks to Hiwot Wolde-Senbet on how BenBen aims to tackle the inefficiencies of land administration in Africa to promote investment, encourage transparent land resource management, reduce poverty and the opportunity for land and property fraud to occur.
Phillip joined BenBen during his MBA studies at Imperial College Business School in 2015 in order to provide a secure online platform where civilians, governments, realtors and financiers can gather information on, monitor and purchase property or land. By leveraging a Blockchain technology, they provide instant access to property information through an easy to use searchable interface.
Why did you choose blockchain technology to combat fraud in the property market in Africa?
Throughout Africa, land records are stored on paper. Over time these paper records get lost, destroyed, and stolen. Fraudsters can easily duplicate titles to sell land that is not theirs, to multiple people at the same time.
Athough efforts have been made to digitize these records, central databases are hacked and data is often stolen. This undermines the banks’ ability to provide lending as land cannot be used for collateral.
This leads to the notion of “trapped capital”. Land that cannot be bought, sold or collateralized due to these insecure records. Furthermore, funding from financial institutions for potential buyers is severely limited, as correct legal ownership cannot easily be determined.
We see Blockchain, being decentralized and more secure to use, as the perfect solution to these fundamental issues.
With Blockchain, all parties to a property transaction; the bank, the buyer, the seller and the land registry office can share the same records during a transaction, creating synchronicity and a traceable history of land ownership, purchase and exchange, eradicating several problems that currently hold up registration of property titles, the assignment of new legal ownership and release of funds.
How is the property market responding to these changes?
With huge enthusiasm. The platform is sold to banks as a way for them to make money. Government agencies can use the platform as a land management tool. Everyone within the value chain benefits.
How are you able to reduce the level of risk that is involved for loan providers and prospective buyers?
The fundamental issue when purchasing property in African is a lack of trust. It is very difficult to prove who the underlying owner of the property is because the records are held on paper.
With our solution, because we have effectively digitalised the whole property lending process, the underlying owner of the property can be immediately identified. This fundamentally reduces the bank’s risk – they can lend against a property in full confidence of who the owner was and who the property is being transferred to.
The social implications behind effectively establishing property ownership in developing markets is huge. As property ownership is established, conflict and property litigation will decline. Banks will become more willing to lend against properties with correct legal titles, and will be encouraged to release more cash as mortgage products. People who would otherwise not have be able to secure a mortgage will become eligible. And digitally secured assets (in the form of houses) increase in value as a result of clean legal title.
The BenBen platform then becomes a revenue generator for the banks. They can issue more loans and more people can acquire a mortgage and a family home.
How are you able to work around the lack of regulation and transparency?
In relation to the regulator, the Ghana Lands Commission (the government department that determines property ownership) are very excited about BenBen helping them digitalise the property purchasing process. Once completed we will have provided them with a management platform from which they can manage their property data including tax payment collection.
To ensure transparency, as well as security, and speed, BenBen utilizes Blockchain technology to facilitate transactions. Each stakeholder to a transaction is issued private keys that give them access to sign the transactions. When each party signs it is timestamped onto the Blockchain so that each land transactions has an audit trail to prevent fraud and can be viewed at any time.
What is the future plan for BenBen?
I'm running BenBen from Cambridge England, having completing my MBA studies at Imperial College Business School. We are focusing all of our efforts into building a viable business in Ghana, but we are also speaking to senior members of Lagos State Government. We’ve also been approached by government agencies in Egypt and Ethiopia, so there is a huge appetite to understand how they can use the BenBen platform. However the history of technology start-ups is littered with stories of those who tried to grow too big too quick. For us the strategy has to be steady development.