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How to drastically simplify land lease contracts. Fiji tests the tech.

18 steps to attain a land lease BEFORE digital transformation

6 steps to attain a land lease AFTER digital transformation

5000 land records digitized and included in the blockchain-ready platform to date

Issue

How much does a piece of land in Fiji cost to lease? Or buy? As it turns out the answer changes depending on who you ask, and when.

As in many developing countries, Fiji’s land registry system is a maze of paperwork and bureaucracy, which makes transactions extremely inefficient.

“The system that they have now, although it works, doesn’t reflect the real valuation of the land,” says the ADB’s Team Leader Chee Anne Roño. 

In the months it takes to validate transactions the market has often moved, and the Fiji system lacks an accurate, real-time land price index. “They wanted to have a more systematic way of structuring the price,” she says.

The ADB chose Tailevu Province to run a pilot project on digital transformation, and the team took an excursion to the records office. “Oh my gosh, when we saw it, it was literally a room full of land records!” exclaims Chee. “We had to hire additional people to do data entry.”

July 2018, ADB and TLTB came together and agreed on the digital transformation project.

An abundance of analogue data was not the only challenge the team encountered.  After substantial interviews, they began to understand that the land leasing process itself was extremely cumbersome, requiring around 18 steps involving five public agencies for each transaction.

A further challenge is that title transactions require 51% consent from landowners, and where the land titles are community-based, that means obtaining many tens of signatures. 

Not only is locating the relevant parties a time-consuming chore, verification of identities creates yet another potential avenue for error, even fraud.

https://www.adb.org/projects/49049-001/main

Insight

The solution that the ADB team arrived at was a pioneering model that combines fully digital land registry system, the establishment of a real time land price index and a secure title verification solution.

But it had to begin with a purely analogue component – education. 

“It’s really about not building the system yet, it’s about getting them to appreciate how a digital platform can help solve a lot of their problems,” says Chee.

Once that was done, the platform would consist of a hybrid solution that combined a low-tech digital tool, in the form of SMS messaging, and a high tech database, based on a blockchain.

Innovation

With the help of KPMG Singapore, the team took just three months to devise an algorithm based on Singapore’s land price index, and started building a prototype of what would become Fiji’s digital land registry platform.

To solve the landowner consent issue, the team layered an SMS voting system on top of the digital land leasing platform. Landowners can now vote on any proposed transaction via text message, saving staff from having to acquire consent manually. This design can reduce a months-long process to mere seconds.

But the real leap forward here is a system that allows records to be kept and transactions validated without fear of fraud or manipulation. For this, the solution is blockchain technology.

In complete contrast to the uncertainty and questions surrounding the so-called “crypto-currency” market, governments across the world have been committing to blockchain solutions on multiple fronts. 

Singapore’s Monetary Authority has developed a platform for Central Banks to exchange digital currency on a blockchain platform, and has also given a trading license for a private, blockchain-based securities exchange. Hong Kong’s Monetary Authority has launched a blockchain trade finance platform. Georgia was the first country to implement a blockchain system for registering land title.

The decentralised, digital structure of blockchains means that the authenticity of transactions and claims to title can be verified in a fraction of the time of a paper-based system. 

The result is a system based upon a creative combination of process re-engineering and cutting edge technology.

Interface of the digital land registry platform prototype.

 

 

 

The designed SMS voting system for the digital land leasing platform. 

Impact

From paper-based land records to a digital registry platform; from a cumbersome consensus mechanism to a text message voting system; from insecure records to an immutable ledger; land transactions in are poised Fiji to become a seamless, efficient process that all citizens, whether digitally savvy or otherwise, can benefit from.

Land transactions will be executable in a matter of days rather than months, and transaction prices can be transparent and verifiable at all levels.

The hope is that this experience of digitizing land records can be used to harmonize all records throughout every department of the Fiji government.  

This project is under ADB’s Regional Technical Assistance: Promoting Smart Systems in ADB’s Future Cities Program (49049-001), which also supports developing smart systems in other cities such as Tbilisi and Bandung for better and livable urban development. More information can be found at ADB project overview.

 


Insiders

  • Chee Anne Roño
    Chee Anne Roño

    Team Leader, Promoting Smart Systems TA at Asian Development Bank (ADB)

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  • Reijeli Cokanasiga - Taylor
    Reijeli Cokanasiga - Taylor

    Manager Strategic Planning, Research and Development at ITAUKEI LAND TRUST BOARD

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  • Jan Reinmueller
    Jan Reinmueller

    Partner, Head of KPMG Digital Village; Co-Lead KPMG Global Innovation Network

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