The National Bank of Ethiopia has announced a joint initiative with the National ID Program to leverage the country’s digital ID system Fayda. Through the initiative, Fayda will be the primary identification for all financial institution transactions, according to Biometric Update. The ambitious plan aims to enroll all bank customers on the digital ID platform by 2024, as part of the government’s push for greater financial inclusion.
Fayda, which means “value” in both Swahili and Arabic, may be a game changer. The implementation of Fayda as a digital ID is expected to streamline identity verification for bank users, ensuring a more efficient system that guarantees data privacy and security.
The Fayda program is supported by the World Bank and will be implemented using a Modular Open-Source Identity Platform (MOSIP), an open-source software that serves as a common framework for building national ID systems. Originating in India at the International Institute of Information Technology-Bangalore, MOSIP has gained international recognition and support from organizations including the Bill & Melinda Gates Foundation, Omidyar Network, and Tata Trusts.
The World Bank’s endorsement of digital ID projects stems from its belief in the immense opportunities they can unlock, particularly for vulnerable populations. By enabling people to prove their identities, digital ID systems facilitate access to essential services such as education, healthcare, social protection, and financial inclusion. Governments can also leverage these systems to deliver services more efficiently, while reducing costs and combating fraud.
The mandatory use of digital ID for banking operations in Ethiopia marks a significant step forward in the country’s pursuit of financial inclusion. Through Fayda and MOSIP-based technology, Ethiopia is joining a global movement towards secure, efficient, and inclusive digital identification systems. This transition holds the promise of transforming Ethiopia’s financial sector and empowering its citizens to access a wide range of services and opportunities.
