Two arms of the United Nation will be coming together to partner with the government of Sierra Leone in developing an ID system that will be based on the Blockchain technology.
A Model For All Nations
The two arms i.e. the UNCDF (UN Capital Development Fund) and the UNDP (UN Development Programme) will be collaborating with a non-profit technology firm Kiva which will be lending its institutional protocol that is similarly named. Through this project, Sierra leone’s over seven million citizens will be able to have full control and ownership of their Blockchain based identification information the same way crypto investors have complete ownership of their Blockchain based digital assets.
Kiva has been in operation for more than a decade, a period during which it was operating without Blockchain technology but was still able to disburse loans totaling more than $1.2 billion. The non-profit’s Kiva protocol will make it possible for the unbanked to access banking facilities in countries lacking such innovations. Sierra Leone is just the first among a host of other countries that the UN hopes to extend this innovation to.
UNCDF’s deputy executive secretary, Xavier Michon, in his statements said that through the implementation of this project Sierra Leone has become among the first to build a credit bureau that is advanced and most importantly completely secure. He said that the project will possibly change the current landscape of the financial industry allowing for the radical inclusion of more people adding that it will definitely serve as a model to not only developing nations but also the developed nations in the future.
Inclusivity of The Unbanked
As of this time, 80% of the population in Sierra Leone does not have any access to an identification system that is formal. As a result, many SME’s (small and medium-sized enterprises) have had a hard time when looking for loans to expand their businesses. The lack of access to an identification system means many in Sierra Leone do not have a verifiable credit history and as a result are not able to access a financial system that is mainstream. This is not only a problem for the common people, but even prominent businesspeople have also been affected as was seem in the case where one of the prominent people in the nation was denied funds to expand his business in another region due to his lack of a credit history.
One way in which the government of Sierra Leone tried to deal with the situation was to create a Credit Reference Bureau, which although was a positive step in the right direction was still unable to be inclusive to citizens who do not have any credit history. Through the establishment of a Blockchain based ID system, Kiva will be able to include the unbanked within the community in the system and allow them to have a verifiable digital identity.
Funds Unlocked For Those In Need The Most
Neville Crawley, the CEO of Kiva said that through this system, it will be possible for funds to not only b unlocked but also made available to the segment of the population that is most in need of them.