Kiva Protocol

Billions of people are excluded from the formal financial system because they lack access to reliable, verifiable identity. 

Our solution is a decentralized, open source, interoperable digital identity platform that gives individuals complete control of their identity data. Protocol allows individuals to deliver verifiable foundational identity credentials to third-party financial institutions via a secure digital identity wallet.  Designed specifically for use in developing market contexts, Protocol supports a range of in-person and remote authentication modalities, and works in offline environments.

If scaled in conjunction with appropriate enabling environments, Protocol can help bring hundreds of millions of people into the formal financial sector by reducing new account onboarding costs, eliminating the need for paper documentation, improving compliance, and expanding access to credit and other financial services.

More than one billion people cannot prove who they are because they lack government-issued identification. Millions more rely on paper-based documentation that makes it costly and cumbersome to access digital services. Women are disproportionately impacted by this identification gap. 

Even in jurisdictions with national-scale identity programs, few have been designed to interoperate with digital services. Globally, 161 countries have implemented national identity systems but only 7% of countries have fully-integrated, multi-purpose digital ID programs.

Identity creates unique challenges for financial inclusion. Twenty percent of unbanked people in low-income countries experience lack of identity documentation as the primary barrier to accessing formal financial services.  

Protocol works with functional and foundational identity issuers to enable country-scale digital identity infrastructure.  Human-centric by design, Protocol delivers interoperable, self-sovereign digital identity wallets that provide individuals with complete control over the sharing of and access to their personal identity data.  Implemented via a user-friendly digital identity wallet, Protocol can lower barriers to the financial system by: a) making it easier to open a transaction account, b) enabling remote onboarding and c) enabling financial sector deepening by supporting the delivery of additional services to the individual.

Protocol is designed to serve the billions of individuals who are currently excluded from the formal financial sector. We have worked with these communities for the past 15 years, delivering over $1.5 billion in zero-interest loans to unbanked and vulnerable populations in 92 countries, including more than $1 billion in loans to women and women-owned businesses. 

Based on our experience, we observed that unbanked borrowers commonly confront two systemic barriers when attempting to access the formal financial system: (1) lack of verifiable identity and (2) lack of trusted financial history. Even borrowers with a flawless credit histories in the informal sector are unable to obtain a loan from a commercial bank because their repayment histories are not associated with unique digital identities. We believe we can solve this foundational data infrastructure problem by providing a low cost, interoperable digital identity and financial history platform that allows individuals to digitally verify and authenticate their identity to financial institutions.

Protocol extends centralized, foundational ID systems into digital ID wallets that allow individuals to share verifiable credentials with  other third parties using biometric or SMS-OTP authentication. This enables financial institutions to authenticate the identity of new customers anywhere in the world, whether or not the customer has access to a computer or smartphone.  Our implementation in Sierra Leone utilizes API and SDK integration to allow individuals to deliver government-issued identity credentials at financial institution branches using on-premises thumbprint readers. By extending foundational ID systems to human-centric ID wallets, Protocol can expand the use of digital identity for economic inclusion.

Protocol is the first open source, decentralized digital identity system in the world to be implemented at national scale. It gives individuals complete control over their identity data, with technical and architectural safeguards to ensure that identity information can only be shared with the user’s knowledge and consent. Built using Hyperledger, a project at the Linux Foundation, Protocol is entirely open source and can be maintained and operated at reasonable cost without vendor lock in.

Protocol is currently powering Sierra Leone's National Digital Identity Platform (NDIP), which enables 3.6 million Sierra Leoneans to access foundational government-issued identity credentials via biometric or SMS-OTP authentication at one of several financial service providers participating in an early pilot of the NDIP's eKYC utility. Although the pilot is currently paused in light of Covid-19, early results demonstrated full functionality and returned digital identity credentials to participating FSPs in less than 11 seconds (on average).

Lack of identity verification is a major barrier to financial access and inclusion. Governments and donor organizations are building foundational identification systems to help achieve SDG Target 16.9. But legal identity alone does not alone help access the financial system. Individuals must be able to share those credentials with financial institutions in a form that provides high levels of assurance at low cost.  

By lowering the cost of compliant identity verification (for users, doing away with paper-based documentation requirements), and reducing compliance risks for financial institutions (by delivering foundational, government-issued digital identities with high levels of assurance, as required by the Financial Action Task Force), Protocol can ease the pathway for new account opening.  When combined with the appropriate enabling environment, including clear regulatory guidance on digital onboarding and electronic know your customer (eKYC) requirements, we believe Protocol can accelerate access to the financial system.

Protocol extends existing identity systems into consumer-permissioned, digital identity wallets. Protocol amplifies the functionality of legacy systems and thus can be incorporated without any disruption to identity programs already in-flight.

There are two phases to a Protocol technical implementation: (1) integration with the identity issuer (often, a civil registry); (2) integration with approved financial service providers (FSPs); and (3) market uptake and adoption. Phase 1 - identity issuer integration - is the most time and resource intensive but ultimately depends on the quality and format of the underlying identity database, and any legal or technical constraints on the data architecture or processing environment.  Phase 2 - FSP integration - is relatively “user friendly” in that approved FSPs can incorporate the Protocol eKYC utility in existing customer onboarding and compliance workflows using simple API or SDK integrations.

Protocol is an open source technology that interoperates with emerging global digital identity standards including the World Wide Web Consortium’s (W3C) verifiable credentials and the ITU’s Decentralized Identity for Development standards. 

Protocol can work in offline and rugged environments - so long as the identity verifier (typically a financial institution) can eventually establish a connection to a verifier node in the Protocol network. Consent prompts and documentation for any consumer-facing applications can be optimized based on local context.

Current identities created using Kiva Protocol: 3.6 million

Year one: 4+ million (depending on new civil registration)

Year 5: difficult to estimate - as many as 100 million

Our primary barriers are (1) funding and (2) regulatory and policy modernization.

1. Funding Post-Covid. Private foundations, donor organizations, and host country governments are all severely constrained by the near and long-term resource demands of Covid-19. Although Protocol is relatively inexpensive to implement (less than USD$1 per capita for a country-level implementation), we anticipate implementation-related funding constraints will continue for the next 12-18 months.

2. Regulatory and Policy Modernization. Protocol enables real-time identity verification for eKYC and remote customer onboarding for FSPs. However, large scale adoption by the financial sector requires clear regulatory and policy frameworks endorsing the use of eKYC to advance financial inclusion. In our experience, these frameworks typically take longer to implement than the underlying technology.

Active and ongoing conversations with donors, multilateral finance institutions, and technical assistance providers.

Our team includes 15 FTEs.

Kiva has lived and breathed the challenges of financial inclusion for the past 15 years. We are deeply committed to eliminating the key structural barriers to financial inclusion through human-centric, open source technology. Our team includes some of the leading open source developers in the world, individuals with deep expertise in developing market payment and social protection solutions, and leading experts on financial regulation and regulatory modernization for financial inclusion. And, as our early work in Sierra Leone has demonstrated, we are capable of executing efficiently and effectively, even in capacity-constrained markets.

We have partnered with the Government of Sierra Leone, the United Nations Development Programme, and the United Nations Capital Development Fund on country-level Protocol implementations under the terms of a Memorandum of Understanding.  Within the open source communities, we actively contribute to the Linux Foundation (Hyperledger) and World Wide Web Consortium.

We have relied on a combination of grant funding and self-funding to support core Protocol infrastructure development. For ongoing in-country operations, we will rely on a progressive pricing model with revenue sharing. This means Kiva’s ongoing operating costs will be offset by a portion of the fees the host government will collect from private sector actors utilizing the system for eKYC verification and onboarding. We recommend progressive pricing for market participants to ensure that new account onboarding is free (or nearly free) for unbanked customers entering the formal financial sector for the first time.

Our goal is to achieve financial sustainability in country-specific contexts through a combination of (1) concessionary or low cost debt funding for in-country implementation activities and (2) cost recovery for ongoing operations via revenue sharing in eKYC utility fees charged to the private sector by the host country agency or government.

Our core infrastructure development and Sierra Leone implementation efforts were funded by grants as well as Kiva’s balance sheet.

We are actively pursuing concessionary capital to support core infrastructure development and design.  In addition, we are evaluating concessionary and debt funding to support specific country-level deployments.

The Mission Billion Challenge provides a unique opportunity to showcase innovative solutions to the identity gap that disproportionately impacts the global poor and, in these unprecedented times, will frustrate the delivery of vital social protection programs. 

Protocol integrates with existing government identity systems to deliver human-centric, interoperable digital identity wallets.  This open source technology can be implemented quickly and efficiently to deliver population-scale digital identity coverage, with specific financial sector applications for eKYC and remote customer onboarding. By participating in the Mission Billion challenge, we hope to demonstrate the power of Protocol to governments and multilateral agencies wrestling with the urgent need to modernize their public digital infrastructure to support an expanded range of essential public and private digital services.

See below

We are interested in partnering with government and multilateral stakeholders on country-level deployments of Protocol to support digital identity, open source payments, and modernized G2P infrastructure.