A billion people have no legal identity - but a new app plans to change that

A legal identity is not just about opening a bank account: access to healthcare and your right to vote may depend on it. But just under 1 billion people in the world can’t prove who they are, according to the World Bank.

It’s an issue that tech entrepreneur Joseph Thompson has found a way to tackle. His start-up AID:Tech has created a digital app that allows people without official documents to create a personal legal identity.

A UN goal

Ensuring everyone has a legal identity, including birth registration, by 2030 is one of the United Nations’ Sustainable Development Goals (SDGs). It prompted the World Bank to launch its Identification for Development (ID4D) initiative in 2014.

The latest data from the Bank shows there are just over 987 million people in the world who have no legal identity, down from 1.5 billion in 2016. The majority live in low-income countries where almost 45% of women and 28% of men lack a legal ID.

For the almost 80 million people forced to flee their homes by war or persecution last year, the situation is even worse. Identity documents are often lost in the confusion and yet they can be vital to the success of their claim for refugee status.

A smartphone solution

Thompson’s app uses blockchain to preserve the user’s digital identity from interference, making it accessible only to the person whose ID it holds. As a digital solution, it goes with the grain of how many people in emerging economies manage their finances using smartphones.

A study of 15 developing nations identified 600 million people who have a smartphone but don’t have a bank account. Many of these people use digital payment apps to manage their money and these transactions can be used to digitally verify their identity.

More transparency for charities

Thompson hit on the idea after taking part in the gruelling six-day Marathon des Sables in the Sahara. He raised $122,000 for charity, but when he asked how the money had been spent, the charity was unable to tell him because it had no way to track individual donations.

“I’m not a humanitarian or anything, but I just thought there has to be a better way for transparency and traceability of fund transfer,” he says. So Thompson and his team created their ‘Transparency Engine’ which enables charities to follow the money they send to projects.

By making the transactions digital, not only can charities see that donations reached their intended recipients but, by using blockchain, the whole system is much more secure than sending cash.

The first blockchain baby

That’s when Thompson’s thoughts turned to helping solve the problem of people with no legal ID. One of the issues they face is registering the birth of a child. Women without legal ID face particular obstacles where laws require the father’s ID to be used when a birth is registered.

“We’ve got projects in Tanzania where we had the first baby in the world born on the blockchain,” says Thompson. “The mother who gave birth – she owned the data for the child. So she was building a data credit profile. She could prove she got the right medicine.”

AID:Tech, which recently signed off on a project that will help 2 million people, is also working on financial inclusion projects in Uganda, Nigeria and Southeast Asia. Now it’s turning its attention to helping the almost 40 million Europeans who lack access to financial services.

Last year, Thompson and AID:Tech won the Game Changer of the Year award from the Schwab Foundation for Social Entrepreneurship for the impact of their innovations on fighting corruption.

Social innovations are the focus of the Forum’s Pioneers of Change Summit this year. Sessions featuring speakers including Christine Lagarde, President of the European Central Bank, can be viewed online after the virtual event.