Blockchain Use in Disbursing Financial Aid at Higher Education Institutions

Abstract

Financial aid plays a crucial role in ensuring access to education, particularly for individuals from disadvantaged financial backgrounds. Education is a powerful driver of cultural and national development. By facilitating education, financial aid cultivates young professionals capable of driving progress across various fields. Notably, approximately 84 percent of students benefit from financial aid scholarships. In South Africa, bursaries and scholarships play a crucial role in providing essential financial support to students. However, the existing disbursement process is fraught with significant challenges. The manual nature of these processes leads to time-consuming operations, a high risk of errors, delays in fund distribution, and vulnerability to fraud. These inefficiencies hinder the timely delivery of financial aid, posing severe risks to students' academic success. To address these pressing challenges, it is imperative to transition to automated systems that streamline operations, minimise errors and delays, and enhance security against fraud. This transformation will ensure that financial aid reaches deserving students efficiently and securely. Therefore, this study conducts a systematic literature review to thoroughly investigate the challenges faced by financial aid institutions and students in fund disbursement at higher education institutions. Additionally, it examines the potential of Blockchain technology in improving fund disbursement processes. Findings indicate that the current scholarship disbursement procedures in South African institutions are manual, inefficient, and prone to errors, resulting in delays and opportunities for fraud. The urgency of this issue cannot be overstated, as students suffer from both hunger and frustration, while some lose their funds altogether. Importantly, the research highlights that a Blockchain ledger is inherently challenging to tamper with, thereby providing enhanced security. In a Smart Contract Blockchain-based system, every transaction is meticulously recorded on a distributed, publicly visible ledger, ensuring traceability and transparency of all disbursements and significantly reducing the risk of fraud.