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