UN joins blockchain-based ID initiative for Sierra Leone
The United Nations’ Capital Development Fund (UNDCF) and Development Programme are supporting Sierra Leone’s government in developing a blockchain-based ID system for the West African nation’s seven million people.
UNDCF and UNDP are partnering with technology non-profit Kiva, which will lend its institutional protocol of the same name to implement the “Credit Bureau of the Future.” The initiative would allow Sierra Leone citizens to have complete and secure ownership of their identities, similar to blockchain assets in a decentralised network like that of Bitcoin.
Kiva has been able to crowdfund without blockchain over the past 13 years to raise more than $1.2bn in loans for people in more than 80 countries and the Kiva protocol marks a major new step in extending advanced banking access to the unbanked.
Priority for Sierra Leone
Sierra Leone has been chosen first in implementing the initiative as it has one of the greatest needs for such innovation, said Xavier Michon, UNCDF’s deputy executive secretary.
“Through this implementation, Sierra Leone is setting out to build one of the most advanced, secure credit bureaus,” he added. “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.”
Currently 80% of Sierra Leone citizens have no access to a formal identification system, which is a major obstacle for business people engaged in start-ups and small businesses when seeking capital to launch or expand services. In the absence of formal identity and credit history, individuals cannot access the mainstream financial system.
The Sierra Leone government attempted to address the issue by launching a credit reference bureau, its effectiveness was limited when offering financial inclusion of people with absolutely zero credit history. Kiva’s blockchain-based ID system aims to alleviate the problem 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’s 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.”