Microloan nonprofit Kiva has teamed with the government of Sierra Leone to help bring financial services to the 80% of the country’s residents who don’t have access to traditional banks.
Using Kiva’s biometric blockchain technology, an individual’s thumbprint is linked to a central database that records all credit events on a single ledger, according to news reports. That will enable them to open a bank account with only a fingerprint, rather than the documented financial history previously needed under anti-money laundering and terrorism financing rules.
Before, if a Sierra Leonean wanted to open an account, he might get asked for 10 identity documents, and even if he had them it might take two weeks, Matthew Davie, Kiva’s chief strategy officer, said in an interview on the Bank Innovation blog. Now, all he has to do is thumbprint in and show his national identity card.
Each successful applicant will be assigned a digital wallet, where transactions will be recorded using Blockchain.
The initiative is significant because if successful it might serve as a template to help unbanked citizens of multiple emerging-market countries. Up to 1.7 billion adults worldwide are unbanked, according to a 2018 report from the World Bank.
- San Francisco-based, which crowdfunds its loans, has provided more than $1.3 billion in microloans to 3.3 million people in 78 countries around the globe. Sierra Leone is the first country to implement an online credit system designed by the nonprofit.
- While Sierra Leone moves ahead with e-wallets, the demise of JPMorgan Chase & Co.’s Chase Pay app this month is a sign that Americans not be as eager to switch from traditional banking and payment systems.
Karma Take: The Sierra Leone project highlights how Blockchain technology may one day be used to give billions of unbanked people access to financial services, opening up avenues for would-be entrepreneurs, farmers and homeowners to build wealth and reduce poverty worldwide.