By Johannes Santos (ABIDJAN) –
West African Monetary Institute (WAMI) is to receive $8 million from African Development Fund (AfDF) to support enhanced banking identification and financial sector efficiency in the West African Monetary Zone.
The $8 million, already approved by the Board of Directors of the AfDF, is to be used for the establishment of a digitally interoperable unique bank identification system and harmonised customer identification framework for The Gambia, Guinea, Liberia and Sierra Leone.
According to a statement by the African Development Bank Group (AfDB), in Abidjan, Ivory Coast, implementation of the project will commence in July 2023, led by the WAMI, working with central banks of the participating countries and in close collaboration with banking and non-banking financial service providers.
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 29th March.
The new bank identification system will link 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 on-going 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.
Dr. Olorunsola E. Olowofeso, WAMI Director General, said: “The Unique Bank Identification (UBI) and Digital Interoperability project was borne from the success of the Bank Verification Number (BVN) implemented by the Central Bank of Nigeria. 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.