India: Biometrics for financial inclusion

Financial inclusion and women empowerment (Economic Times)

In 2014, the Bhamashah initiative was refurbished with a broader coverage of gender empowerment, financial inclusion and family-based benefits. It now provides end-to-end delivery system for individuals and various family-based benefits of the government’s social welfare schemes — like the PDS, pension funds, health insurance, MNREGA and scholarships — through a centralised e-government platform by leveraging the enhanced electronic infrastructure of the state.

These transfers are made to the bank account of the woman of the house through the Bhamashah smart card, which also provides biometric identification of family members. The card is also a co-branded debit card with the participation of several banks.

The merits of financial inclusion are deeply rooted in citizen empowerment. Access to credit is a critical link between economic opportunities and outcomes. By empowering individuals and families to cultivate economic opportunities, financial inclusion can be a powerful agent for strong and inclusive growth. With women constituting half the population, their equal participation in society is imperative for sustainable development.

No wonder this man is smiling.
Amartya Sen

One of the important assertions Amartya Sen makes in “Development as Freedom” is that empowering women in developing countries through education and financial inclusion is a tried-and-true way toward economic development for a country as a whole.

He won the Nobel Prize for Economics in 1998 for his contributions to welfare economics.

Biometric technologies can help make inclusion programs more efficient and more affordable.

Biometrics for economic development

Kenya: Biometric Exercise Boosts Kenya Adolescent Girls (All Africa)

Implemented by Save the Children, the exercise uses easy-to-use and inexpensive equipment to read students’ fingerprints to record daily attendance.

The biometric information is then used to identify those students who meet the conditional threshold of 80 percent school attendance and, therefore, qualify for a cash transfer twice a term.

The cash transfer goes to their household head, whose biometric details have also been captured and linked to a bank account to facilitate electronic household cash transfers.

Many families in the developing world face difficult decisions about whether to invest in a child’s education (even if it’s “free”) or to maximize the family’s current earnings by putting children to work. Programs like the one described above have made a difference in the lives of millions in Brazil, Mexico and Indonesia and backing up the cash transfers with a biometric audit trail should help insure that available funds are used efficiently.

Biometrics aid in aid delivery

IOM Uses Biometrics to Aid Displaced in Democratic Republic of the Congo (MENAFN)

The lack of identity documents for IDPs in the Eastern DRC poses a challenge in targeting humanitarian assistance. Almost 80 per cent of adults living in sites having no form of identity documents. In response IOM launched a biometric registration pilot project in eight displacement sites around the city of Goma in June 2014.

Between June 2014 and April 2015 IOM took the fingerprints of nearly 16000 IDPs. In the context of food distributions the collected information is used to ensure that humanitarian aid reaches the most vulnerable and avoids duplication and fraud.

Biometrics are an inexpensive, fast and accurate way of setting up ad hoc ID systems from scratch. Those interested in development and disaster recovery, take note.

Biometrics a factor in World Bank’s optimism on India

While India’s Economy has Turned the Corner, Wider Reforms are Needed to Boost Economic Growth (World Bank)

The report points out that India’s government has begun to implement reforms to unlock the country’s investment potential – to improve the business environment; liberalize FDI; boost both public and private investment in infrastructure; quickly resolve corporate disputes; simplify taxation, and lower corporate taxes. States are set to receive more resources and spending power, and the government has reiterated its resolve to implement the GST by April, 2016, a move that is widely expected to meaningfully increase India’s tax to GDP ratio. New models of delivering benefits through direct transfers to bank accounts, together with the biometric identification of beneficiaries, are expected to reduce leakages.

India: UID milestone

Aadhaar world’s largest biometric ID system (Times of India)

The Aadhaar card has emerged as probably the world’s largest biometric identification programmes in the world with the Unique Identification Authority of India (UIDAI) issuing nearly 82 crore cards.

1 crore = 10,000,000

We haven’t been spending as much time on issues of economic development as we have at other times in the past, but India’s major ID initiatives are creating a lot of opportunities to lift millions out of poverty.

Biometrics as a key enabler of microfinance

Pakistan Microfinance landscape: Opening an account within a minute (Exress Tribune)

…[A] lot of bankable people remain unbanked in Pakistan mainly because of tedious form-filling procedures imposed in the name of know-your-customer (KYC) requirements.

But thanks to the biometric identification devices currently being installed for SIM cards across the country, the microfinance landscape in Pakistan is going to change forever, according to Tameer Microfinance Bank CEO Nadeem Hussain.

After further review…

India’s biometric ID project is back on track (PC World)

The new Indian government has indicated strong support for a controversial project to require residents to have biometric IDs in order to collect government benefits, setting a target of 1 billion enrollments by 2015.

The status of the project was in doubt when a new federal government was voted in last May, as the winning Bharatiya Janata Party had said during the election campaign that it would review the program. The new target signals the new government’s backing of the Unique Identification Authority of India (UIDAI), which was largely seen as a project of the previous government led by the Congress party.

Biometrics for vaccination records

Scanning babies fingerprints could save lives (Michigan State Univ.)

Each year 2.5 million children die worldwide because they do not receive life-saving vaccinations at the appropriate time.

Anil Jain, Michigan State University professor, is developing a fingerprint-based recognition method to track vaccination schedules for infants and toddlers, which will increase immunization coverage and save lives.

Operation ASHA has been using biometrics for tuberculosis treatment, too.

INDIA: Cash for Poor to Dilute Power of Oligarchs (Bloomberg)

IUndian central bank Governor Raghuram Rajan urged the government to directly transfer cash to the poor instead of offering public services, saying the money would liberate millions from corrupt middlemen and politicians.

Cash would empower the poor to choose where to buy goods, providing an alternative to government-run monopolies and creating competition in the private sector, Rajan said in a speech in Mumbai yesterday. Prime Minister Narendra Modi’s plan to bring bank accounts to the poor — set to be unveiled this week — would facilitate the transfers, Rajan said.

Brazil and India are leading the way to biometric forms of identity verification

SINGULARITY HUB The Brazilian bank Bradesco recently began using a palm vein biometric system called Palm of Your Hand to provide secure log-in on its ATM machines. Clients who choose to use traditional personal identification numbers can continue to do so, but those who go with the new system can forego PINs while simultaneously satisfying the national social security program’s requirement of “proof of life” in order to collect benefits.

In India, the national government is rolling out the largest biometric identification database to date, requiring all of its billion-plus citizens to register in hopes of reducing benefits fraud.

Computerworld honors Aadhaar

Computerworld Honors 2013: ID program empowers citizens in India (Computerworld)

An estimated 400 million Indians cannot prove their identity. As a result, they’re shut out of countless opportunities. They cannot access educational programs, open a bank account, apply for welfare benefits or seek higher-level employment. Lack of identification is also problematic for the government, because as much as 40% of the $40 billion it directs yearly toward helping these individuals doesn’t reach the intended beneficiaries.

Aadhaar is more than a technology program that collects biometric data from residents. It is a transformative initiative that will allow all Indian residents the opportunity to participate more fully in society.

The Computerworld Honors Program, now in its 25th year, recognizes organizations that use information technology to promote and advance the public welfare, benefit society and business, and change the world for the better. This year’s 267 Laureates are that rare group with the ability to recognize problems and the courage to take bold steps to solve them. They are an inspiring reminder that great things can happen when determined people explore technology’s full potential.

Countries are coming to know their poor by name

The Economist, has published a really good piece about the progress made in reducing global extreme poverty over the last twenty years and what it might take to finish the job over the next twenty.

Biometric smart cards get a mention toward the end in the passage below, but this is not a biometrics story, it’s a story of how and why poverty, which used to be an effect of scarcity, can now be defined and addressed as a series of organizational challenges. Biometrics are helping people meet those challenges and we’re proud of the work we’ve done in helping that process along.

Poverty: Not always with us (The Economist)

[…B]y 2030 nearly two-thirds of the world’s poor will be living in states now deemed “fragile” (like the Congo and Somalia). Much of the rest will be in middle-income countries. This poses a double dilemma for donors: middle-income countries do not really need aid, while fragile states cannot use it properly. A dramatic fall in poverty requires rethinking official assistance.

Yet all the problems of aid, Africa and the intractability of the final billion do not mask the big point about poverty reduction: it has been a hugely positive story and could become even more so. As a social problem, poverty has been transformed. Thanks partly to new technology, the poor are no longer an undifferentiated mass. Identification schemes are becoming large enough—India has issued hundreds of millions of biometric smart cards—that countries are coming to know their poor literally by name. That in turn enables social programmes to be better targeted, studied and improved. Conditional cash-transfer schemes like Mexico’s Oportunidades and Brazil’s Bolsa Família have all but eradicated extreme poverty in those countries.

Emerging ID concensus

The twin pillars of international cooperation on economic and financial order have recently been making positive statements about India’s UID project.

IMF: Direct cash through Aadhaar to save 0.5% of GDP for India (The New Indian Express)

World Bank chief: Aadhaar to help eradicate poverty (Business Standard)

Former Chief of Staff to President Clinton, John Podesta also goes on the record with Casey Dunning for the Guardian:
We can end poverty, but the methods might surprise you

New technologies mean that states can craft their programs to help specifically the most vulnerable populations, and that they can do so efficiently. The widespread use of mobile phones, analytics and biometric technology lets a country implement social safety nets with far greater speed and efficacy than previously imagined. The government of India was able to enroll 200 million people in a national biometric ID effort in less than two years, modernizing a vital system that provides the poorest of the poor with food assistance, education vouchers and job opportunities.

Throw in the Center for Global Development Lecture: Technology to Leapfrog Development, by UID chief Nandan Nilekani, and it looks like an emerging international development consensus is emerging around the idea of “ID as Development.”

IMF sees substantial savings from UID

Direct cash through Aadhaar to save 0.5% of GDP for India: IMF (New Indian Express)

Integration of direct cash transfer with Aadhaar will take time but the scheme will help Indian government save 0.5 per cent of the GDP, International Monetary Fund (IMF) said on Monday.

“… the total savings could be substantial: if the combination of direct cash transfer and Aadhaar eliminates the estimated 15 per cent leakage cited above for the programmes being integrated, savings could total 0.5 per cent of GDP in addition to the gains from the better targeting of spending on the poor,” the IMF said in a report.

That may be an undersetimate.

South Africa: Social grants spokesperson deems biometric technology “a worthy investment”

Analysis: State of the art technology behind SA’s social grants (The New Age)

The latest biometric technology used by the South African Social Security Agency (Sassa) to disburse social grants to about 16 million beneficiaries on a monthly basis is proving to be a worthy investment in making life easier for beneficiaries of social grants.

The number of beneficiaries of social grants in South Africa grew from 2 million in 1994 to about 16 million in February 2013. Of these an estimated 11 million are Child Support Grant beneficiaries.

Since March 2012, Sassa has been engaged in the process of mass enrolment of all beneficiaries using the latest biometric technology. This followed a major announcement by Minister of Social Development Bathabile Dlamini on behalf of the government. The technology includes finger and palm verification as well as voice recognition to ensure that the grant money is paid to the relevant beneficiary at all times.

I didn’t realize that the number of people Sassa has to keep up with had expanded eight-fold in less than twenty years. It’s probably a god idea to automate fraud detection in a disbursements organization that is growing as rapidly as that. Otherwise, it’s hard to see how a fraud detection system that depended upon old-school detective types could keep up. Creating the human capital and cultural climate for their success is a long and expensive process.

Not all biometric elections are created equal

Africa’s election aid fiasco — It’ll take more than mobile phones and biometrics to make Africa’s elections fair and trusted (The Spectator)

The development industry is as fashion-prone as any other. Fads come and go. There are a few giveaways when it comes to spotting them. Deceptive simplicity is one indication. The idea should have a silver-bullet quality, promising to cut through complexity to the nub of a problem. Even better, it should be a notion that can be rolled out across not just a country, but a region.

Covering the Kenyan elections, which climaxed with the inauguration last week of Uhuru Kenyatta as the country’s fourth president, I suddenly realised I was watching a fad hitting its stride: the techno-election as democratic panacea. We’ll see it again in Mali’s elections this summer.

There is a lot to recommend this article, but I’d caution the author to take things one case at a time rather than encourage a bounce from one extreme — techno-election as democratic panacea — to the opposite: it’s all a scam. Of course, neither is true.

As we’ve so often said: biometric systems are extremely effective tools in the hands of capable managers. They can’t do anything, including run clean elections, all by themselves. ID management is about people, after all.

No one should paint, for example, Ghana, Kenya, and Zimbabwe with the same brush. They have almost nothing, not even biometric elections, in common.

Biometrics & ID infrastructure: Perfect is the enemy of good

No good work whatever can be perfect, and the demand for perfection is always a sign of a misunderstanding of the ends of art.
—John Ruskin

Everybody knows that there’s nothing perfect in this world, yet plenty that is imperfect also happens to be very useful.

Identity management is one of these. Conducted by people to account for people, with human beings on both sides of the equation, perfection is out of the question. Only someone who misunderstands the ends of the art of ID can reject a certain solution because it falls short of perfection.

Is using a name to identify a person perfect?
Some people can’t speak. Some people can’t hear. Some people can’t read. Some can’t write. Many people share the same name.

A token?
Tokens are lost, stolen, counterfeited.

Maybe a photo then?
Some people can’t see.

Fingerprints, then?
Some people don’t have hands, at all.

Iris?
Some people don’t have eyes.

People cope with imperfection in all aspects of their lives including identity management. Planning for exceptions to the routine ID management transaction is something all existing ID management systems already do. Biometrically enabled ID management systems are no different.

None of the above ID techniques is perfect yet (especially when combined) they are all useful. In this context, a proper understanding of Ruskin’s “ends of art” is Return on Investment, not perfection. The economic value of something does not lie in its perfection. It lies in its ability to help improve things by a measure exceeding the sum of its costs.

What distinguishes biometric systems from earlier ID management techniques, especially in the development context, is that they are an extremely effective and affordable means of establishing a unique identity for individuals among populations that have not been highly organized in the past.

Low access to education? High illiteracy? Poor birth records? Highly transient populations? Recent wars left high numbers of orphans or displaced people? New democracy? For countries answering “yes” to any of these or other similar questions, biometric systems are about the only economically viable choice for developing the ID infrastructure that people who can already verify their identity take for granted.

Additionally, when compared to the investments made by the powers of the Industrial Age to develop their ID management systems —  investments still out of reach for the governments of billions of people — biometrics while cheaper, seem capable of outperforming Industrial Age systems. We know this because existing systems using the best Industrial Age techniques have been audited using biometrics. When the older systems are audited with biometric techniques all sorts of errors and inconsistencies are discovered, errors whose numbers would have been reduced significantly, had biometrics been used in the creation of new profiles in the relevant ID systems.

Biometrics & Development

Using biometrics in development: lessons and challenges (Guardian)

Citizens of rich countries take official identification for granted. But many in poor countries lack robust IDs, or indeed any documentation at all. This “identity gap” has been an obstacle to inclusive development in many countries. But increasingly, governments and donors have turned to digital fingerprints, iris scans, and other biometrics to provide inclusive, secure and accurate identification for their citizens, from national IDs, to elections and social welfare payments. In a recent Center for Global Development working paper, we surveyed 160 cases where biometric identification had been used for such programmes in over 70 developing countries — cases which cover over 1 billion people!

More at the link.

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