The Board of Directors of the African Development Fund (ADF) has approved $8 million in funding toward the establishment of a digitally interoperable unique bank identification system and harmonised customer identification framework for The Gambia, Guinea, Liberia and Sierra Leone.
The project is expected to enhance financial sector efficiency within the participating countries, leading to increased access to finance and further regional integration efforts. Approval of funding from the Bank’s concessional lending window was made on March 29.
The new bank identification system will link the banking accounts of individuals across different financial service providers. Over 53 financial service providers across the participating countries will be included in the project. This will allow them to verify their clients’ identities on an ongoing basis (Know-Your-Customer or KYC), combat fraud, discourage loan defaulting and strengthen correspondent banking relationships. On the part of customers, KYC-compliant finance sectors will bolster trust and confidence and ultimately, encourage access and usage of financial solutions.
The BVN, an 11-digit unique identity for each individual across the Nigerian Banking industry, is tied to all bank accounts and has resulted in a drastic reduction in electronic banking fraud, non-performing loans and elimination of ghost names from the civil service payroll.“
Olowofeso further noted that the Unique Bank Identification will leverage existing national identification systems and help to strengthen financial integration in the West African Monetary Zone.
African Development Bank Director for the Financial Sector Development Department, Ahmed Attout, welcomed the Board approval, noting that it attested to the strong partnership between the Bank and WAMI. “Irrefutable and secure identification is fundamental to building financial consumer access and trust and overall development of the financial sector,” he observed.