UN-supported digital ID, KYC project to boost financial inclusion in Malawi
A project to help the Reserve Bank of Malawi (RBM) put in place a unified database of digital ID and Know Your Customer (KYC) data has been launched to allow many more Malawians access to a broad range of services.
The initiative, which seeks to build on the increasingly robust digital identity ecosystem already existing in the country, is co-sponsored by the United Nations Capital Development Fund (UNCDF) and the United Nations Office for South-South Cooperation (UNOSSC), through the India-UN Development Partnership Fund, according to a UNCDF press release.
Malawi’s digital ID system was established within a period of three years with support from the United Nations Development Programme, and it has over 9.2 million citizens already enrolled for it.
The two UN agencies are providing technical assistance for the digital KYC project, while the RBM will be overseeing the implementation on the ground.
The project mostly targets low-income citizens and those who face challenges identifying themselves when trying to access certain public services, with the major goal of helping the RBM digitize the KYC system for financial institutions in the country.
Most KYC procedures for the moment, especially for financial institutions in Malawi, are done manually, the UN Agencies regret, as this is not only cumbersome, but time consuming and costly.
The digital ID project, the UNCDF said, will facilitate access to basic services such as health, education and finance and will allow citizens more opportunities to enjoy financial services and products.
The project will start with 1,500 people registered to the digital KYC platform of the RBM, 50 percent of which will be women.
Reacting to the launch of the project, UNOSSC Interim Director Adel Abdellatif expressed gratitude to the India-UN Fund support which he said will see the practical rollout of the system.
“Digital financial inclusion is an area in which South-South cooperation has particular promise and is already delivering remarkable results — given the plethora of technological innovations born within the developing country context, and effectively rolled out in other developing countries lifting millions out of poverty. India has shown great leadership on last mile digital financial inclusion — reaching remote and vulnerable communities,” said Abdellatif.
UNCDF Digital Finance Coordinator Iris Kissiti said, “as we move towards digital transformation in Malawi, we must ensure that the key enablers for a digital economy such as infrastructure and identity requirements are supportive of this goal.”
“e-KYC has the potential to impact the digital economy holistically from a societal, consumer and business perspective making it easier for Malawians especially women, youth and rural communities to access and use formal financial services,” added Kissiti.