NewsImpactFlexID: Identity as a Means to Unlocking Every Human's Potential

FlexID: Identity as a Means to Unlocking Every Human's Potential

By

Matt Keller, Head of Social Impact

At its most fundamental level – from the moment we come into this world – our identity exists as an indelibly recorded testament of our birth with its place, its date, and its time. That testament contains our name, our gender, and the nationality we were born into.  Over time, this information, along with other identifying characteristics, is captured on passports, census data, and a variety of state-issued documents.

Those pieces of identity allow us to gain access to a world in which proof of identity is required for almost every aspect of civic life. Proof of identity is typically required to go to school, drive a car, cast a ballot, travel between nations, access healthcare, run for office, and gain employment. Identity is also required to open bank accounts, borrow or send money, establish credit, and avail oneself of those financial instruments that can grow wealth and secure an economically viable future.

It is so vital, in fact, that Article Eight of the United Nations Convention on the Rights of the Child says that “every child be born with an identity and that no government should interfere with that right.”

Yet there are more than one billion individuals who have no way to prove their identity, which means they have little to no chance of being a part of any community that extends beyond their immediate town or village, little opportunity to attend school, and no chance to move beyond the economic and geographical limits imposed by lack of personal proof. Most are trapped as part of an informal economy that offers few benefits or access to wealth-generating opportunities. 

To give a snapshot of the enormity of the challenge, only 25% of birth registrations are recorded in the Democratic Republic of the Congo (DRC), a country estimated to have a population of over 100 million people. From the very start of their lives, these children born without identity face a life where even entering school becomes challenging.

Yet, even for those who hold government-issued proof-of-identity, they are still burdened with stitching together various pieces of documentation and finding access to one of a somewhat limited number of centralized institutions that can verify their identity according to globally recognized KYC (“Know Your Customer”) standards. 

This challenge remains daunting for many people. In fact, according to the World Bank, roughly 1.7 billion people in the world have no access to the financial services and instruments necessary for poverty reduction. But solutions are being developed from the very places proof of identity is most needed, and we are doing everything we can to invest, support, and elevate them.

In Zimbabwe, a company called FlexID, founded by Harare native Victor Mapunga, has built a platform and wallet for the issuance, storage, and sharing of identity with verified digital credentials (e.g. eKYC, driver’s license, land certificate, etc.). Key to making this work is the Self Sovereign Identity framework (SSID), which means at the center of all interactions, the user has fundamental control and access to their data and allows institutions that they see fit to interact with their digital identity. 

The FlexID wallet allows users, through a full SSID app or a WhatsApp chatbot, to interact with multiple institutions that use a single API to either issue or perform verifications. This all runs on the Algorand Blockchain, which provides an extremely economical and scalable layer one –  a prerequisite for onboarding a billion users in developing countries. With easy access to verified credentials, FlexID aims to enable individuals to get broader and faster access to a wide range of financial, insurance, healthcare, and agriculture services. 

Let’s focus on one individual who uses the FlexID platform in Zimbabwe.

Meet Tawana Mapfumo, one of the 300,000+ FlexID wallet holders. Tawana, like 90% of the population of Zimbabwe, is part of the informal working sector. The informal economy in Zimbabwe has been estimated to contribute close to 60 percent to the country’s overall GDP. Tawana owns a costume jewelry shop which enables her to sustain herself and her 8-year-old daughter. She has no local bank to support her which is often – if not always – the case for those working in the informal sector. And since the nearest bank is 100km away, she has no access to critical wealth-building financial instruments, such as loans and insurance. This exclusion reinforces the cycle of poverty for many others like her, which in turn hinders sustainable and equitable economic development in the rural areas of the country.

Due to the lack of access to financial institutions, Tawana is forced to rely almost exclusively on very risky informal, short-term funding at high-interest rates. Likewise, without a regulated, controlled, and safe work environment, or markets to produce and sell her products, Tawana is made vulnerable, with fewer opportunities to formalize her businesses.

By using FlexID, she is now able to gain easy access to banking services remotely. With the Commercial Bank of Zimbabwe (CBZ) enabling FlexID’s SSID solution, they can now onboard her to the bank by conducting a KYC using only WhatsApp. She will also be able to purchase the raw material needed for her business from a vendor who also maintains a bank account with CBZ, thus enabling her to build a relationship with the bank without ever visiting them again.

There are hundreds of millions of individuals just like Tawana. From Zimbabwe to Afghanistan to India to the Congo, proof of identification will transform access to services and civic life. This potential transformation that identity provides is a major focus on what we do in the Impact space at Algorand.

When we make impact investments at the Algorand Foundation for those building on our blockchain, we look at – among other things – the potential to positively impact lives at scale. We assess the level of interest from others in supporting the initiative and we look at the team behind the idea. When you meet someone as passionate and as committed as Victor Mapunga, who through lived experience makes him uniquely qualified to understand the problem he is trying to solve, betting on the team becomes easy. Victor’s faith in his team’s ability to scale and impact millions of people just like Tawana is palpable. It’s a faith that can and will lead to a more inclusive world where access to opportunity is equalized, and where that access may finally lead to the full realization of every human’s potential.

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