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An eye and blockchain identity

Sierra Leone and UN Agencies Use DLT to Create a National ID System

Reading Time: 2 minutes by on September 30, 2018 Adoption, Blockchain, Business, Finance, News
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Sierra Leone, the UN Capital Development Fund (UNCDF), the UN Development Programme (UNDP) and leading international non-profit Kiva, have recently partnered to launch a national digital identification system. According to a press release published on September 28, 2018, the new initiative will provide Sierra Leone’s seven million citizens a formal digital identity and control over their personal credit information.

Unlocking Capital For the Unbanked

The World Bank indicates that 80 percent of Sierra Leone citizens are unbanked and cannot access financial services due to a lack of formal identification and verifiable credit history.

These people are blocked from the global economy and cannot leverage financial transactions such as gaining credit from a local shopkeeper due to their lack of formal identification. Sierra Leone citizens primarily operate in a cash-only economy which brings with it a lot of risks and prevents individual and their families from breaking free from the poverty cycle.

The Kiva Protocol aims to solve this problem in Sierra Leone by providing the unbanked a digital and formal identity with distributed ledger technology (DLT). Kiva chose to roll out the Kiva Protocol in Sierra Leone out of 85 different countries available because it is the only country that has one credit bureau, which covers less than one percent of the population.

The Kiva Protocol will record every citizen in Sierra Leone and ensure that they have ownership over their data and information. Ownership over personal information is a great catalyst that will unlock funds, capital, and opportunities for the Sierra Leone people.

Protocol To Allow Formal And Informal Institutions Identity Verification

The Kiva Protocol enables both formal and informal financial institutions to verify an individual’s identity and their credit history. With a clear, digital identity, the citizens of Sierra Leone can gain access to a larger number of financial transactions from bank loans to credit with their local shops, which allows citizens to obtain loans for essential resources and activities like medical requirements, building businesses, or paying for further education.

The goal is to start implementing the Kiva Protocol in 2019, and it is expected that the first stage of the Protocol will take approximately three years. “With this partnership in Sierra Leone, we hope to carve a path to a system of global identity and federated credit history,” said Neville Crawley, the CEO of Kiva.

“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.”

While the first implementation of the protocol occurred on September 27, 2018, at the UN General Assembly, there’s no denying that the new digital identification protocol can be a new model for both developing and developed countries.

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