A new initiative is in progress to establish a national blockchain-based credit bureau in Sierra Leone. This announcement was made by the country’s president, Julius Maada Bio, at the 73rd Session of the U.N. General Assembly (UNGA) on Thursday, September 27.
According to the president, the move would help tackle the barriers that many citizens face when they attempt to access financial services. In addition, users can create a verifiable credit history by establishing a national digital identification system using distributed ledger technology (DLT).
A Better Life For Sierra Leoneans
This move would see Sierra Leone partner with Kiva, a non-profit tech startup on a blockchain-based identification system project, the U.N. Capital Development Fund (UNCDF) and the U.N. Development Programme (UNDP).
“The Government of Sierra Leone has signed a Memorandum of Understanding (MOU) with UNDP, UNCDF, and Kiva on strengthening our National Digital Identification and Credit Reference Bureau process,” said President Maada Bio.
With the aid of Kiva’s protocol, a nationwide digital identification system will be designed to help the country’s seven million citizens access the financial services they need to improve their lives. Also, both formal and informal financial institutions from banks to shopkeepers that issues credit will help contribute to a person’s credit history.
At the moment in Sierra Leone, unbanked people cannot leverage financial transactions from the country’s informal economy, which includes obtaining credit from a local shopkeeper, to build their credit history.
The Kiva Protocol will capture a wide range of financial transactions, to help people access the financial services they need, including loans for businesses, education or basic healthcare services.
The blockchain system will further ensure that the citizens will retain “secure and complete ownership of their bio-data and information,” as it offers an alternative to storing individuals’ identity data in centralized data storage.
“Through this implementation, Sierra Leone is setting out to build one of the most advanced, secure credit bureaus. It could serve as a model for both developing and developed nations in the future,” said Xavier Michon, Deputy Executive Secretary of UNCDF.
Kiva’s Blockchain Expertise in Global Poverty Alleviation
According to reports, for close to 13 years, Kiva has worked to provide financial access to the unbanked and underserved people globally.
So far, it has helped crowdfund more than USD 1.2 billion in loans for people in more than 80 countries, with plans in progress to establish a blockchain system that will help keep proper records for these transactions. Globally, about 1.7 billion adults are unbanked and unable to access financial services they need to improve their lives
Do you think the latest solution developed by Kivi will help curb the issue of loan refusal for citizens with no credit history?Never miss out on our daily crypto news, stories, tips, and price analysis. Join us on Twitter | Telegram | Facebook or subscribe to our weekly Newsletter.