According to a 2019 report by Mc Kinsey, only 28 percent of Nigerians have identities with half of that number lacking digital identities and 70 percent of the citizenry lack any form of identification. By unlocking the potential in digital ID could grow Nigeria’s GDP by 7.1 percent in 2030.
To fix this friction, the National Identity Management Commission (NIMC) plans to deploy a digital identity system which will capture data of all Nigerian citizens. Considering the fact that Nigerians carry different means of identification, the system will integrate all the multiple identities issued by different public and private institutions.
Lack of unique identity has prevented millions of Nigerians from accessing credit facilities from financial institutions. Cash is the most preferred means of payment due to lack of a centralized form of identity. Credit as a percentage of GDP is lower in Nigeria compared to its peers on the continent like South Africa, Egypt, Kenya, Ghana and Angola. In South Africa, credit cards are mostly used to transact for goods and services while in Kenya, Mpesa the e-payment platform is widely used by all, even alms collectors.
The absence of a credit system prevents Nigerians from accessing goods and services when they need them. Cash based transaction has its inherent risks which include huge processing fees, attacks from armed robbers, etc.
World Bank data reveals a negative credit decline in Nigeria from 22.3 percent in 2009 to 10.95 percent.
This explains the Central Bank of Nigeria’s directive to banks to deepen their loan books by 60 percent of consumer deposit. Lenders such as fintechs and deposit money banks are utilizing technology to unlock loans for their customers with credit scoring based on the available data on their financial habits.
The NIMC should learn from India’s digital identification Aadhaar which enables biometric authentication has covered over 90 percent of its population creating access to finance for its SMEs and rising middle class.
Also a startup Verify Me, a leading database management solutions provider has unveiled a real time ID verification platform which integrates the National Identity Number, Driver’s License No and Bank Verification No. It has studied the industry and global market in line with anti-money laundering compliance for banks and other financial institutions which explains why the Know Your Customer is important and the British General Data Protection Regulation directive for privacy guidelines and decided to build a system which provides the most convenient solution for Nigerians in adherence to strict compliance rules to promote a culture of data integrity and privacy.
With its platform BVN (bank verification number), NIN (national ID number) and Driver’s License numbers can be linked to harmonize digitized data which becomes available for organizations to meet their throughput demands.
There are about 70 million Nigerians with various forms of identities ranging from the NIN, Driver’s License No and the BVN. Most of them cannot access financial services ranging from insurance, banking services because they are financial excluded due to lack of identity and Verify Me in collaboration with the National Identity Management Commission has unveiled an enrollment programme for people to pre-register on their platform which will also collect their biometrics so that all their data will be sent to the NIMC for faster processing and availability of their National Identity Numbers.
Verify Me’s decision to not work with the telecommunication operators who are the major repositories for digital data with over 160 million registered subscribers on their networks is because of tier level which is lower level KYC and lack of standards for facial recognition which is part of Verify Me’s capabilities.
It does a lot of Know Your Customer data verification services for Nigerian banks and operates across all the six geopolitical zones except conflict zones and helps in mapping addresses for security purposes.
Another friction which it is helping to fix which is common in Nigeria is people committing offences in a particular location and relocating to new neighborhoods without the residents being aware of their new neighbors. It fixes through creation of a national work history repository for anyone to plug into and access work history which somebody else has reported enabling corporate and domestic employers to access the work history of their employees to know those who have criminal records to avert potential losses.
Verify plans to roll out series of biometric type recognitions and a KYC Marketplace which will offer originators of addresses used for verification a percentage of revenues each time they are used for authentication. It should explore integration of blockchain into its identity management solutions platform for security, transparency and authenticity.