Last month, Sierra Leone’s President Julius Maada Bio officially launched a national blockchain-based digital identity management system. It ensures that Sierra Leone becomes the first country to unveil such a system in Africa.
Although developed by US-based crowdfunding firm Kiva in collaboration with the National Civil Registration Commission, the blockchain ID system is a government initiative designed to empower citizens with access to financial services. It will also provide residents with formal identity and control over their credit information.
Kenya launched a similar system earlier this year, though Huduma Namba is not built on the blockchain.
Sierra Leone Blockchain ID System
Over 2 billion people around the world are deprived of basic banking and credit products. In Africa alone, approximately 67% of people don’t have a bank account. Traditionally these unbanked individuals are unable to prove their identity to access micro-finance services.
Until now, opening a bank account in Sierra Leone would require bringing utility bills or information on an individual’s credit history. The problem is that the majority of the population do not have these crucial documents.
But with the new Sierra Leone blockchain ID system, it takes only a few seconds to conduct a credit check. It uses fingerprints and other biometric data to identify citizen. Besides, the system allows the bank to get a complete and unaltered version of the customer’s credit history using their fingerprints.
Enhancing credit reporting
Sierra Leone is currently one of the most blockchain-friendly countries in Africa. The West African nation used blockchain technology to count votes during its parliamentary elections last year. In July at the Africa Blockchain Conference Kampala, President Maada Bio urged Africa nations to take a leading role in the adoption of new technologies such as blockchain, 3D printing, quantum computing, and biometrics
As a nonprofit organization that aims to bridge the gap of financial inclusion in developing countries, Kiva is hoping that the Sierra Leone blockchain ID system will bring robust credit reporting to the finance industry. This will ensure that financial services are deployed to people more quickly, especially the unbanked. After Sierra Leone, the company is planning to scale the platform to other countries.
Kiva Protocol is built on Hyperledger Fabric, an open source blockchain framework built by the Linux Foundation.
David Sengeh, chief innovation officer for the Directorate of Science, Technology and Innovation in Sierra Leone, spoke highly of the blockchain ID system, stating:
“A verified identity makes everyone’s life easier — the government, the citizens, the private sector, everyone. So it was easy to get everyone aligned about the goals and value of this initiative.”
Sengeh further added that the national digital identity system could be used to identify and determine the credit score of an individual, in a process known as eKYC (electronic Know Your Customer).
But as with any digital national database, privacy and security of citizen data is a major concern. Sengeh, however, explained that efforts have been put in place to protect biometric data against potential data breaches or attacks.