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Biometrics and Financial Inclusion in sub-Sahara

– Cenfri

In this paper, Barry Cooper, Masiiwa Rusare, Albert van der Linden, and Matthew Ferreira discuss how biometric initiatives will help those in Africa currently unable to access financial services due to insufficient ID

The authors draw on a 2018 study by the World Bank Group to point out how a lack of identity is denying large numbers of adults in sub-Saharan Africa the opportunity to open a bank account.

Living without a basic proof of identity is widely known to create a barrier when it comes to accessing most of the core services in society, from healthcare to government grants and education. But as this article shows, lack of documentation makes it nearly impossible to access financial services, given the financial provider’s need for due diligence and customer authentication.

An absence of proof of identity means the number of adults unable to open bank accounts is higher than 40% in some African countries.

However biometrics, which identify individuals based on their physical or behavioural traits, are a possible solution. For consumers, biometrics are more convenient, while for providers, they are more reliable, lower risk and cheaper.

When it comes to banking, biometrics can be used to authorize access to personal data, pre-populate forms and agreements as well as verify signatures. Crucially, this can then open doors to a wider range of financial products. 

But as the article states, in Africa biometrics are set up and kept within different sectors and industry silos, which limits their use.

The authors therefore highlight the example of Aadhaar - India’s national biometric identity system - which can be used to access a host of services from:

“Opening bank accounts, drawing money at ATMs, applying for a driver’s licence and receiving government subsidies.”

In essence, biometrics make the consumer interoperable with the broader financial system

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