President Julius Maada Bio of Sierra Leone recently signed a memorandum of understanding under which US-based nonprofit Kiva, the UN Capital Development Fund (UNCDF) and the UN Development Programme (UNDP) will attempt to create a digital identification (ID) system that includes all 7 million citizens of the country. Each person will get an ID number that formal and informal financial institutions can use to track credit histories, which can make it easier for individuals to access loans for “businesses, education or basic medical services.” The system will be based on blockchain, using distributed ledger technology (DLT) that “allows simultaneous access, validation and record updating in an immutable manner across a [computer] network spread across multiple entities or locations.”
Since it was established in 2005, Kiva has raised USD 1.2 billion from approximately 1.7 million individuals. As of 2017, this money was distributed as loans to 3 million people via microfinance institutions in 80 countries. Kiva reports total assets of USD 40.5 million.
UNCDF, which was founded in 1961, works to deliver poor people in the world’s 47 least developed countries “capital and technical support through Inclusive Finance programmes to ensure that more households and small businesses gain access to financial services.” During 2017, UNCDF supported 138 financial service providers that report achieving a net increase in client deposits of USD 6.5 billion.
UNDP, which was founded in 1966, provides expertise, training and grants to developing countries, focusing on poverty reduction, democratic governance, crisis prevention, disease control and social development. As of 2017, it has received contributions of USD 4.9 billion and carried out operations in 170 countries.
By Michelle Fleming, Research Associate
Sources and Additional Resources
Kiva press release
https://www.kiva.org/cms/final_kiva_sierra_leone_un_partnership_announcement.pdf
Investopedia definition of DLT
https://www.investopedia.com/terms/d/distributed-ledger-technology-dlt.asp
Kiva website
https://www.kiva.org
UNCDF website
http://www.uncdf.org
UNDP website
http://www.undp.org
Coin Telegraph story “UN, Sierra Leone Launch Blockchain-Based ‘Credit Bureau of the Future’”
https://cointelegraph.com/news/un-sierra-leone-launch-blockchain-based-credit-bureau-of-the-future
MICROCAPITAL BRIEF: UNCDF, EU, Private Sector Foundation of Uganda, Uganda Development Bank Financing SMEs via “Support to Agricultural Revitalization and Transformation” (START) Program
https://www.microcapital.org/microcapital-brief-uncdf-eu-private-sector-foundation-of-uganda-uganda-development-bank-financing-smes-via-support-to-agricultural-revitalization-and-transformation-start-progr/
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