Page 86 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

their budget from a government agency or donor organization (Figure 6). A number of large international
donors embrace national identity projects as part of their development strategies. Table 5 reflects the findings
of Dahan & Gelb (2013), who suggest, “Partner financing can [help] to ensure a focused and inclusive identity
program. Donors could commit, as far as possible, to the development and use of the core national ID systems
for projects that they support, rather than developing new functional registries for every project. This will
strengthen demand for the use of the system and encourage registration” (p. 6). In the programs we review,
donor agencies include the United Nationals Development Program (UNDP), the United States Agency for
International Development (USAID), and the Asian Development Bank (ADB). Besides providing financial
support, disseminating best practices, offering legal support, and ensuring technology is robust, donors also
play a key role in ensuring that the poor do not face cost barriers and systematic exclusion to identification
(ibid.). Other funding sources for the programs we review include private firms and public-private partnerships
(PPP).

Table 5 – Key Stakeholders in National ID Programs

Other Development Partners/
Type of Stakeholder Multilaterals (MDBs) Foundations/NGOs
agencies
Key Stakeholders • African Development Bank (AfDB) • Data2X • International Organization for
• Asian Development Bank (ADB) • CRC4D Migration (IOM)
• Inter-American Development Bank • World Vision • United Nations Development
Programme (UNDP)
• Organization of American States (OAS)
• United Nations High Commis-
• UniteCommissioner for Refugees sioner for Refugees (UNHCR)
(UNHCR)
• United Nations Population Fund
• World Bank Group (WBG) (UNFPA)

Source: Adapted from Dahan & Gelb, 2015.
There are two notable examples that deviate from these traditional funding structures: NADRA in Pakistan
and RENIEC in Peru. Both programs depend on generating their own revenue, meaning they internalize initial
enrollment and production costs and charge fees associated with the cards to earn back revenue (Ahmad
Jan, 2006; Harbitz & Boekle-Giuffrida, 2009). In Pakistan, NADRA charges fees to organizations or government
bodies when a citizen’s biometric information is used for authentication, for example by a bank (Malik, 2014).
While both institutions are under the auspices of a government body, NADRA formed an independent public
company, NADRA Technologies Limited, through which it provides services to other countries to implement
similar national identification programs (Ahmad Jan, 2006). By independently self-regulating their budgets,
NADRA and RENIEC are argued to have developed successful funding structures, and potentially exercise more
freedom in their activities as compared to programs that are restricted by the timeline or resources of their
funding source (Malik, 2014).

Though most technology costs are generally falling, we find evidence of challenges relating to program costs
for eight national identity programs. Since costs impact many aspects of program implementation, we restrict
cost challenges to macro-level issues that arise directly from a lack of funding.

The most common financial and capital challenges are associated with delays or indefinite suspensions in
enrollment and production (Cambodia – National ID, Cote d’Ivoire, Malawi, Tanzania, and Uganda). The
National Registration and Identification program in Malawi experienced a one-year delay until it was allocated
additional funding from the national budget (Chilunga, 2015), while the program in Cote d’Ivoire was repeatedly
suspended due to insufficient funds to deploy and pay the technical enrollment teams (The Carter Center,
2011). Beyond the initial costs incurred, countries must be able to further bear the ongoing costs associated
with data management, security, and continual enrollment. Cambodia’s IDPoor program saw great success
with initial enrollment in part through partner financial support, but faces uncertainty in the funding needed
to maintain systematic coverage long-term (Cambodia Ministry of Planning, n.d.). Countries may also face
challenges with the costs of training and building labor and technical capacity for implementing and managing
ID programs, but we do not identify any programs that specifically mention this issue.

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