In 2000, revered Peruvian economist Hernando De Soto published The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, a study on the relationship between poverty and property rights. In the book De Soto claims approximately $9 trillion is tied up in land, homes and businesses belonging to people who do not have deeds or titles.
Peter Kirby, CEO and founder of Factom, draws inspiration from De Soto and endeavours to make an impact in the land title arena. “Land Title corruption is a very common problem in the developing world and a immutable ledger solution could help these economies move forward dramatically.”
According to the USAid and Tenure website approximately 80% of privately held land in Honduras is untitled or improperly titled. “Only 14% of Hondurans legally occupy properties and, of the properties held legally, only 30% are registered.” The ongoing land title disputes in Honduras have lead to violence, environmental abuse, and the displacement of indigenous people.
Although the details of the Honduran project cannot yet be revealed, Kirby explains there are two key contributors to the lack of land title registries in the third world. The first is due to taxes, “if it is an unrecorded property it is much harder to tax,” he said.
The second is a distrust of the officials in control. According to David Johnston, Chairman of the Factom Board, when land registries went digital in Honduras they were held in centralized databases. These entries were easily altered by administrators. “This has been a big problem in the developing world the last decade or so,” said Johnston.
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