Solutions for Lenders to Combat Identity Fraud in Africa 1

In the fight against fraud, especially in Africa, identification is the
solution to get to know your customers and keep track of your employees. In this
article we will take a closer look at how biometric technology can be put to use
in your business so you can be sure someone is who they say they are. In
addition, we will also look at a case study of a biometric financial card system
that was implemented in Uganda to illustrate what can be done to effectively
combat identity fraud within an African country.

As a credit provider you need to know your borrowers, especially within a
continent such as Africa where many African countries either have no identity
number infrastructure in place or it is found to be very ineffective.

Biometric technology can be used as a basis for an effective identity
solution since it uses a unique and measurable characteristic of a human being
to identify a specific individual. This includes fingerprints, iris scans,
retina scans, hand geometry and voice recognition which are inherent and do not
change over time.

It works on the basis of pattern recognition or verification, extracting a
feature and comparing it against an electronic template stored in a customer
database. E.g. the minutia points found on the skin ridges of the finger, also
known as whorls, arches and loops, are used as a pattern for recognition

This pattern recognition or verification technology can be integrated into
numerous electronic applications to solve the fundamental problem of verifying
an individual’s identity. It replaces the standard username and password
login/verification with a fingerprint or other identification procedure by
simply placing your fingertip or other biological feature on / to a biometric
scanning device/reader, which is linked to your business’ PC. You can use these
biometric integrated identification applications to manage access to secure
applications, provide a certain individual rights to certain services and even
conduct electronic transactions. You can use it for the identification of your
customers and employees within your existing organisation with the knowledge
that they are who they say they are.

In the instance where biometric technology is integrated with smart card
technology you can use it for the identification of your customers in markets
where there are no national identification system in place. Uganda is currently
in the process of implementing a financial identification card system where the
latter method is being applied. A “live” biometric template (e.g. scan of each
borrower’s fingerprint) is captured at the point of interaction and compared to
a stored biometric template that was captured initially when the individual
enrolled in the national financial identification system. All consumers are
being supplied with such a biometric financial card providing a secure,
convenient and cost-effective identification technology and eliminating identity
theft and fraudulent activities within the Ugandan lenders’ businesses.

You can also choose to implement biometric technology within your business.
Ask yourself if you can afford to be without it in today’s turbulent times. By
utilising biometric applications or cards your consumers’ reputation will be
protected and you will be allowed to transact with them with higher levels of
confidence and trust. Consequently, also enhancing the efficiency and financial
security of your credit granting activities and assisting in the growth of
individuals, your business, the financial sector and the African economy as a

Should you have any questions or comments that you would like to
share with us about the above article please do not hesitate to contact
Compuscan Academy on 021 888 6000 or email

Source: Voice of Credit – Official Journal of the Institute of Credit
Management Issue 2 2009, “Biometrics as a risk mitigator in the Credit Granting

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One thought on “Solutions for Lenders to Combat Identity Fraud in Africa

  • Tass Schwab

    I need to add that this technology can be used in any industry that could have high risk of fraud or businesses that deal with sensitive information. Such as surveillance companies, the military – the list is endless!