Two of the United Nation’s wings are joining hands with Sierra Leone government to build a blockchain-based ID system for their seven million people.
The UN Capital Development Fund (UNDCF) and the UN Development Programme (UNDP) have entered into a partnership with Kiva, a technology nonprofit. Kiva will lend its institutional protocol of the same name to implement the “Credit Bureau Of The Future.” It would allow Sierra Leone citizens to have complete and secure ownership of their identities, similar to blockchain assets in a decentralized network like that of Bitcoin.
Kiva was working without blockchain for over 13 years. And even without the distributed ledger, the nonprofit managed to crowdfund more than $1.2 billion in loans for people in more than 80 countries. Their Kiva protocol is a new step in the direction of enabling advanced banking access to the unbanked, beginning with Sierra Leone, which is in a dire need for these innovations. Xavier Michon, Deputy Executive Secretary of UNCDF, agreed.
“Through this implementation, Sierra Leone is setting out to build one of the most advanced, secure credit bureaus,” he said. “It could serve as a model for both developing and developed nations in the future and has the potential to change the landscape of financial inclusion radically.
To this date, 80% of Sierra Leone citizens have no access to a formal identification system. It is particularly problematic to the people engaged in startups and small businesses who are continually seeking capital to launch or expand services. In the absence of formal identity and credit history, these people cannot access the mainstream financial system. In one example, even a prominent businessman was not able to raise 300 million (over $350,o00 USD) for business expansion in Dubai. Reason: he did not have a credit history.
The Sierra Leone government, in its earlier efforts, have launched a Credit Reference Bureau, but that alone could not contribute to the financial inclusion of people with absolutely zero credit history. A blockchain-based ID system from Kiva could, therefore, improve things on the ground by granting underbanked and unbanked people with a digital identity of their own.
“With this partnership in Sierra Leone, we hope to carve a path to a system of global identity and federated credit history,” said Kiva CEO Neville Crawley. “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.”
Featured image from Shutterstock.
Last modified: June 11, 2020 1:49 PM UTC