A statement by African Development Bank (AfDB) said the fund was for establishing a digitally interoperable unique bank identification system.
It said the fund was also meant to establish a harmonized customer identification framework for the Gambia, Guinea, Liberia and Sierra Leone.
“Implementation of the project will commence in July 2023, led by the West African Monetary Institute (WAMI).
“It will work 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 March 29,” it said.
According to the statement, the new bank identification system will link the banking accounts of individuals across different financial service providers.
It said over 53 financial service providers across the participating countries would 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,” the statement said.
WAMI Director-General, Dr Olorunsola Olowofeso, said the Unique Bank Identification (UBI) and Digital Interoperability project was borne from the Bank Verification Number (BVN) success implemented by the Central Bank of Nigeria.
Olowofeso said: “The BVN, an 11-digit unique identity for each individual across the Nigerian Banking industry, is tied to all bank accounts.
“And has drastically reduced electronic banking fraud, non-performing loans and eliminated ghost names from the civil service payroll.
“The Unique Bank Identification will leverage existing national identification systems and help to strengthen financial integration in the West African Monetary Zone.”
AfDB 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.
