Page 43 - Implementation of Secure Authentication Technologies for Digital Financial Services

submitted from the POS terminal to the compa- Currently, unbanked people cannot leverage finan-
ny’s back office. This scores very high on custom- cial transactions from the ‘informal economy,’ such as
er satisfaction. history with a local microfinance institution (MFI), to
• Apart from the above benefits, this process also build their credit histories. Kiva Protocol integrates
helps Telecom Service Providers (TSPs) do away with a wide range of financial institutions to include
with archaic processes of CAF collection, data their transactions in a person’s credit history – from
entry, document scanning, tele-verification and commercial bank loans to smaller MFI loans – to
physical storage and retrieval of CAFs and docu- help people access the financial services they need,
ments from the warehouse. As an outcome of this, including loans for businesses, education, and basic
TSPs are able to store the KYC information of their medical services. Kiva is building the system that will
customers in an electronic format which can be record these transactions using open-source DLT
retrieved very quickly being an electronic record. frameworks supported by the Linux Foundation.
• The process also benefits the government author- Components of the digital credit reporting ecosys-
ities be it the TERM Cells for audits and the law tem include:
enforcement agencies (LEAs) as this is a highly
compliant process and will significantly help in • Digital ID & eKYC
traceability of the customer should there be need The National Civil Registration Authority
for any law enforcement requirement. (NCRA)-supported digital ID enables universal
unique identification of all citizens, which is critical
7.1.2 Example: Sierra Leone National Digital to accurate credit federation and profiling. Addi-
Identity and Credit Platform – Kiva tionally, this digital ID is valid for eKYC verification.
A new partnership [15] between Kiva, Sierra Leone • Credit Reporting
and the United Nations (UNDP & UNCDF) is set to Financial Service Providers report credit data
bring a nationwide digital identification system to with the Credit Reporting Bureau (CRB), the
the people of Sierra Leone to provide citizens with only national-scale credit bureau in Sierra Leone
formal identity and control over their own credit which is housed at the Bank of Sierra Leone. Such
information. reporting is facilitated by simple API integrations
President Julis Maada Bio of Sierra Leone with existing financial service provider platforms.
announced the initiative during his address to the • Credit Lookup
United Nations General Assembly on September 27, CRB generates credit reports and scores based on
2018. the subject’s credit history, with consent from the
The centerpiece of the partnership is Kiva Pro- subject.
tocol [16], a technology platform which enables • Data-Driven Risk Assessment
a country to create and establish a national digital Comprehensive credit registry enables effective
identification system using distributed ledger tech- risk assessment and competitive rate setting by
nology (DLT). Two of the major barriers to accessing financial service providers.
financial services are a lack of formal identification
and a lack of verifiable credit history. The ultimate Figure 27, Figure 28 and Figure 29 show high lev-
goal of the initiative is to enable national-level finan- el identity, credit reporting and overall ecosystem
cial inclusion initiatives and bring financial products architectures.
and services to populations currently lacking them. At time of writing, the partners have deployed the
Kiva Protocol is designed to address these barri- identity solution at NCRA, and are integrating eKYC
ers by extending national civil digital identification to verification and credit reporting with all financial
all citizens, thus enabling formal and informal finan- institutions in Sierra Leone. Detailed solution docu-
cial institutions to perform near-real-time eKYC veri- mentation will be published in 2020 as the system
fication and credit reporting. goes live and integrations are made available to oth-
er financial ecosystem participants in Sierra Leone.

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