West African Monetary Institute to receive $8 million from African Development Fund to support enhanced banking identification.

The West African Monetary Institute is set to receive $8 million from African Development Fund (ADF) to establish a digitally interoperable unique bank identification system.

The African Development Bank-owned ADF said this will enhance banking identification and financial sector efficiency in the region.

The ADF said the West African Monetary Zone project is expected to strengthen the financial sector, leading to increased access to finance and further regional integration efforts.

In a statement, the ADF said the approved $8 million in funding will go towards the establishment of a digitally interoperable unique bank identification system and harmonised customer identification framework for The Gambia, Guinea, Liberia and Sierra Leone.

Implementation of the project will commence in July, led by the West African Monetary Institute, working with central banks of the participating countries, collaborating with banking and non-banking financial service providers.

The new bank identification system will link banking accounts of individuals across different financial service providers.

According to the ADF, over 53 financial service providers across the participating countries will be included in the project.

It said: “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 Olowofeso, director general, West African Monetary Institute, commented: “The Unique Bank Identification 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 project will leverage existing national identification systems and help to strengthen financial integration in the West African Monetary Zone.

Commenting on the project, Ahmed Attout, director for the Financial Sector Development Department, African Development Bank, said: “Irrefutable and secure identification is fundamental to building financial consumer access and trust, and overall development of the financial sector.”