Nigeria and Togo, two West African countries, have recognized the potential of their biometric digital ID systems in managing government loan programs. In Nigeria, the federal government recently announced that applicants for student loans will now be required to provide their National Identification Number (NIN), along with their biometric Bank Verification Number (BVN). The NIN is used to confirm the applicant’s Nigerian citizenship, while the BVN is essential for financial inclusion purposes, as loan recipients are mandated to have a bank account.
To simplify the loan application process, a dedicated portal has been established, and the entire system will be automated. This move towards digitization and biometric authentication aims to enhance transparency and efficiency.
Meanwhile, in Togo, the government plans to leverage biometric identification through a facial recognition system in the National Inclusive Finance Fund (FNFI). This project, focused on financial inclusion, prevents loan defaulters from securing additional loans, even if they change banks. Whenever individuals with outstanding loans seek new financial support, they will be identified through the biometric database and flagged as defaulters.
During the two-year pilot phase of the FNFI, over 3,000 loans were successfully granted, demonstrating the effectiveness and success of the program. The Minister of Financial Inclusion and Organization of the Informal Sector, Assih Mazamesso, expressed confidence in the new customer database. Through facial recognition, loan defaulters will be automatically identified whenever they approach microfinance institutions for further assistance.
Togo is renowned for its innovative approach to financial inclusion, particularly in the context of welfare payments during the COVID-19 pandemic. The utilization of biometric ID systems for loan management further solidifies their commitment to leveraging technology for inclusive financial practices.
The source of the article is from the blog papodemusica.com