(Reuters) – the Kiva, a San Francisco-based tech and love the use of the blockchain in order to create an online ID database of Sierra Leone, so the people who are struggling to get loans, in order to prove their credit history.
Kiva President, Julius Maada Bio, was officially launched with the system in the capital, Freetown, on Wednesday evening. Bio hopes that this will lead to more Sierra Leoneans into the financial system.
Kiva, facilitates small loans in 80 countries, but Sierra Leone was the first country to implement an online credit system that has been developed by the organization.
“This is a visionary step to be here today to guarantee that Sierra Leoneans were not excluded from the … of the global digital economy,” Bio said in the release.
More than three-quarters of Sierra Leone’s population is outside the formal banking sector, according to data from the central bank. In informal settings such as community banks and micro-finance lenders have been more frequent, but they rarely share information, and generally high rates of interest.
It is a platform that will enable the lenders to seek the citizens’ credit history, using fingerprints and other biometric data that has been collected for a couple of years ago, the government of Sierra Leone, to print the voter ID cards.
Ordinary Sierra Leoneans appear to be excited by the prospect, which Safiatu Mariama Bangura, who with her mother runs a rice restaurant in an aluminum shack with tarp walls of the capital, Freetown.
“It’s very difficult to do business because we do not have a bank account or other means of obtaining the loans,” Bangura said. “[The program] would help us, because my mother does not know how to sign her name, and she knows how to use her finger print.”
Each and every potential client will be assigned to a digital wallet, with the transactions recorded in the blockchain is to keep the user information secure, and to prevent tampering with the army.
“As a national identity program, which would provide the basis for the development of a robust financial services provided by the ecosystem,” said Schan Duff, Kiva’s Vice President of Strategy.
The customers will have to open the wallet via a mobile app. This has been a problem for many people in Sierra Leone, which the Ministry says is less than 15% have access to the internet.
Duff said it and its partners in the field, including the banks, to overcome this through the use of mi-fi devices that can connect to the internet via the telephone network.
Sierra Leone’s government is the system by which all the banks and micro-finance institutions in the country by the end of this year, the Bio said.
“The lack of identification of, or the inability to verify that the identification for credit purposes, increase in the cost of business for everyone,” David, Senghe, who is the head of Sierra Leone’s Directorate for Science, Technology and Innovation, told Reuters over the telephone.
“With a national platform. this means that the businesses, institutions, and anyone who can verify what I am saying about my loan history, it is true). Anyone can have a fake driver’s license, but does not have a system like this.”
Editing by Tim Cocks and Alexandra Hudson