The African Development Fund, or ADF, Board of Directors has authorized eight million dollars to strengthen the continent’s financial sector.
According to a statement from the African Development Bank, the fund was created to construct a digitally interoperable, one-of-a-kind bank identity system.
The money, according to the statement, was also intended to provide a uniform framework for customer identification across the Gambia, Guinea, Liberia, and Sierra Leone.
“The project will begin to be implemented in July 2023, under the direction of the West African Monetary Institute.” (WAMI).
It will work closely with banking and non-banking financial service providers, as well as the central banks of the member nations.
“The initiative is anticipated to improve financial sector efficiency among the participating nations, resulting in greater access to financing and more efforts at regional integration.
The bank’s concessional loan window was approved on March 29, according to the statement.
The new bank identity system, according to the announcement, would connect people’s bank accounts with various financial service providers.
It was said that the initiative will involve approximately 53 financial service firms from the participating nations.
“This would enable companies to enhance their correspondent banking connections, fight fraud, deter loan defaults, and continuously verify the identity of their clients (Know-Your-Customer, or KYC).
According to the statement, “KYC-compliant finance sectors will increase customer trust and confidence, which will ultimately promote access to and use of financial solutions.”
Dr. Olorunsola Olowofeso, the director general of WAMI, said that the success of the Central Bank of Nigeria’s Bank Verification Number (BVN) initiative led to the creation of the Unique Bank Identification (UBI) and Digital Interoperability project.
The BVN, an 11-digit unique identification number for each person in the Nigerian banking sector, is connected to all bank accounts, according to Olowofeso.
And has significantly decreased non-performing loans, electronic banking fraud, and phantom names on the civil service payroll.
The West African Monetary Zone’s financial integration will be bolstered through the Unique Bank Identification, which will make use of current national identification systems.
Ahmed Attout, the director of the AfDB’s Financial Sector Development Department, hailed the board’s decision and said that it demonstrated the close relationship between the Bank and WAMI.
Developing financial consumer access, trust, and the financial sector as a whole all depend on “irrefutable and secure identification,” he noted.
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