San Francisco-based nonprofit Kiva, a company that crowdfunds loans for financial inclusion, has launched a blockchain platform for credit history with the government of Sierra Leone.
According to a Reuters report on Aug. 21, Kiva and the President of Sierra Leone, Julius Maada Bio, jointly launched the blockchain initiative in Freetown, the country’s capital.
Biometric data collected by the government, such as fingerprints, will be used by the platform to give lenders a way of obtaining the credit history of loan applicants.
Individuals looking to borrow money would have a digital wallet for loans, and their transactions would be recorded on a blockchain. The digital wallet will be provided through an app, and Kiva’s partners will provide mobile Wi-Fi hotspots to ensure that users have access to the internet.
According to the Information Ministry in Sierra Leone, more than 85% of citizens lack internet access — and the country’s central bank estimates at least 75% of the population is unbanked. Those who need to borrow money often rely on informal institutions such as community banks, but they rarely disclose credit information and frequently charge high interest rates.
President Bio said the government aims to have all banks and microfinance institutions in the country set up with the blockchain system by the end of the year. David Sengeh, the head of Sierra Leone’s Directorate of Science, Technology and Innovation, said:
“Lack of identification, or an inability to verify that identification for credit purposes, increases the cost of business for everyone.”
Bio first announced that the government was working with Kiva at the 73rd session of the United Nations General Assembly last year.
Banking the unbanked with blockchain apps
As previously reported by Cointelegraph, internet crowdsourcing company Share Internet Data Ltd (SID) and private equity firm LDJ Capital have co-launched an app — LDJ Digital — for blockchain-based digital banking. Its goal is to provide financial services to the unbanked. The app is integrated into the SID platform, which itself is an app that lets users provide temporary internet access to others via mobile devices — similar to how a Wi-Fi hotspot works.