Sierra Leone To Implement Blockchain-Based Identification System

News | September 28, 2018 By:

Sierra Leone, a country in West Africa, has partnered with two United Nations agencies and a technology non-profit to create a national digital identification system using blockchain technology.

Sierra Leone President Julius Maada Bio signed a memorandum of understanding (MOU) with nonprofit Kiva, the UN Capital Development Fund (UNCDF) and the UN Development Programme (UNDP) to modernize the nation’s Credit Reference Bureau and radically transform its financial inclusion landscape.

The initiative will be using the new Kiva Protocol, a digital identification system designed to use blockchain technology to give people secure and complete ownership of their personal data and information. Sierra Leone was selected because it only has one credit bureau that covers 2,000 people – less than one percent of the nation’s population – and 80 percent of the citizens are unbanked and can’t access the financial services they need.

“Through this implementation, Sierra Leone is setting out to build one of the most advanced, secure credit bureaus,” said Xavier Michon, Deputy Executive Secretary of UNCDF. “It could serve as a model for both developing and developed nations in the future and has the potential to radically change the landscape of financial inclusion.”

The initiative will issue digital identification to all citizens in a digital wallet, and enable formal and informal institutions to contribute to a person’s verifiable credit history. The Kiva Protocol will capture a wide range of financial transactions — from bank loans to credit with a local shopkeeper — to help people access financial services, including loans for businesses, education or basic medical services.

“If someone has verified credit history with a local lender or Kiva Field Partner and wants to apply for a loan from a national bank, they can grant that bank one-time access to their credit history,” Kiva said. “However, no institution or the government can access the information without the owner approving. The system is also very low cost to operate, eliminating the type of fees that might prevent people or institutions from using other credit reports.”

Kiva CEO Neville Crawley said that with this partnership in Sierra Leone, they hope to carve a path to a system of global identity and federated credit history.

“This can unlock capital for the populations who need it most, allowing lenders to massively increase services and the flow of funds to the world’s unbanked,” Crawley said.