Tea workers in Sierra Leone are the first in the worldto participate in an online credit system based solely on their fingerprint.
Illiteracy prevents tea workers around the globe fromcompleting basic banking transactions, obtaining online credit and enjoying thefinancial rewards of savings.
San Francisco-based Kiva, a nonprofit financialservices platform providing micro-loans to 80 countries, worked with SierraLeone President Maada Bio in Freetown to make the system available in this WestAfrican coastal country.
In August, Bio told Reuters “This visionary step here todayguarantees that Sierra Leoneans are not excluded from ... the global digitaleconomy.”
The website Biometric Update reports the new systemcould rapidly increase the proportion of the population with bank accounts asset up only requires a thumbprint. The country’s previous biometric capturework means the paperwork will be automatic.
“The entire population of Sierra Leone will be able toopen bank accounts with just a fingerprint,” according to the website. The‘Kiva Protocol’ biometric system links a thumbprint to a person’s identity, andthe entire adult population of 5.1 million is already registered by theNational Civil Registration Authority,” according to the website.
Reuters notes that “more than three quarters of SierraLeone’s population lies outside the formal banking sector, according to datafrom the central bank. Informal institutions like community banks andmicrofinance lenders are more common, but they rarely share credit informationand often charge extortionate interest rates.”
Kiva assigns a digital wallet to each individual withtransactions recorded in blockchain to keep the user information secure andprevent tampering with the ledger, explains Schan Duff, Kiva’s vice presidentof strategy. “A national identity program here would provide the foundation forthe growth of a robust financial services ecosystem,” he said.
Only 20% of Sierra Leoneans have bank accounts andfewer than 15% of the country’s residents have internet access, but those wholack internet access can use mi-fi phones to connect with banks and microfinanceinstitutions by year end.
“A national platform ... means that companies,institutions, and whoever can verify that what I’m saying about my loan historyis (true). Anyone can fake a drivers license, but not a system like this,” saidDavid Sengeh, who heads Sierra Leone’s Directorate of Science Technology andInnovation.
The system will enable the government to establish auniversal credit bureau which could increase lending and boost the economy.
Source: Kiva, Reuters, Biometric Update