Sabhi - Economic Identity for All

Identity ecosystem to power credit services for MSMEs in emerging markets.

Over 65 Million (40%) of Micro, Small and Medium Enterprises (MSMEs) in emerging markets do not have access to finance and allied services due to the lack of an economic identity. This accounts for a total financing gap of $5.2 Trillion. [1]

Economic identity refers to verifiable credentials that define an entity’s proof of existence, creditworthiness and position in an economic value-chain. The few proofs of economic identity that do exist in emerging markets are physical and do not translate easily to the digital realm. The lack of a unified identity solution locks out billions of dollars from the economy. [2]

Sabhi is a mobile-first ecosystem to facilitate access to credit services for MSMEs. Sabhi’s economic identity management and financial inclusion platform has been designed to solve the challenges faced by MSMEs in emerging markets. Sabhi uses an open protocol to allow Micro, Small and Medium Enterprises (MSMEs) to digitally prove their identities in low trust and low connectivity environments. This allows both traditional and digital asset lenders to serve millions of MSMEs that currently do not have access to finance. The Sabhi protocol is novel in its focus on privacy by design, giving MSMEs complete control over the curation, maintenance and presentation of their business and financial data. The Sabhi protocol is comprised of three main systems:

1. Sabhi-Shanakht (Identity Framework): Sabhi-Shanakht creates a global secure identity on the blockchain. MSME owners can publish claims about their business to this identity, and have them verified by others. Data associated with Sabhi-Shanakht is controlled by the business owner and can be selectively presented to relying parties. Sabhi-Shanakht allows lenders to receive the necessary information without forcing borrowers to expose personal information, or risk identity theft.

2. Sabhi-Zamanat (Reliability Score): The Sabhi-Zamanat is a metric of an MSMEs viability and creditworthiness. This decentralized score is calculated using an MSME’s uploaded data and business network.

3. Sabhi-Baseerat (Viability Oracle): Sabhi-Baseerat is a system for reporting and tracking MSME viability by combining data tied to Sabhi-Shanakht with off-chain market data and analytics.

The novel Sabhi protocol allows for attestation-based identity management and the creation of a decentralized peer-to-peer and organizational vouching (“reputation staking”) network. Such a solution is tailor made for MSMEs in markets with little to no public data, allowing them to prove their identity and credibility from within their value chain.

Sabhi bootstraps the identity of MSMEs in emerging markets, in the absence of data and credit infrastructure.

We do this by:

• Using new technology. Blockchain based decentralized identifiers (DID) are used to implement Self-Sovereign Economic Identity. Identity owners control their data, and how it is shared.

• Leveraging local knowledge. The Sabhi protocol uses “peer-to-peer” vouching to represent real-world relationships between businesses. This establishes an MSME's creditworthiness and identity from within its value-chain.

• Attention to User experience. We have employed design thinking to cater to the specific needs of MSMEs in emerging markets.

Privacy by design is a foundational principle of the Sabhi platform. The Sabhi Protocol has been designed from the ground up to ensure the following rules:

• Data is only viewable by its owner.

• Data owners must explicitly consent to share data with third parties.

• No unauthorized parties may view others’ data.

• All data is encrypted at rest and while in transit.

• Data is self-describing and schema aware.

• Data is censorship resistant and integrity checked.

• Data is traversable.

• Meta-data cannot be used to undermine privacy.

• Data attributes are minimized when data is exposed.

• Zero Knowledge Proofs are used wherever possible.

Keeping these principles in mind, we are using trusted cryptographic methods and blockchain infrastructure. Sabhi Protocol uses the well established Hierarchical Deterministic Key Derivation, Decentralized Identifier and Verifiable Credentials Specifications. We have extended these with a robust Decentralized Key Management System (DKMS), to ensure the user is always in control of their data.

Sabhi can integrate with existing services via open APIs.

To enable Identity Providers and institutions to add claims to the blockchain, a modular integration oracle has been developed. The objective is to eventually allow almost every authentication method to be plugged in using services like passport.js. The roadmap envisions the Sabhi Integration Oracle (Sabhi IO) enabling over 300 authentication strategies, including the currently implemented OAuth and SAML. This will allow organizations and governments to easily fit Sabhi into their existing digital identity stack.

In addition, Sabhi also enables integration with client applications using the Sabhi Software Development Kits (SDKs). This allows identity providers and institutions to include Sabhi into their existing mobile apps.

The user facing part of the Sabhi platform has been designed using guidelines from existing research for mobile money and identity documents in emerging markets. [3]

Salient Features

• Bio-metrics and 2FA are used instead of pass-codes whenever possible.
• The front end of the protocol is configurable and extensible to allow it to be made culture free if possible, and socially and culturally relevant otherwise.
• The Sabhi protocol supports multiple languages.
• Focus has been paid to reduce the cognitive load, by using familiar user interface components.

Underlying the design of the Sabhi Protocol are the principles of Recipient Ownership and Vendor Independence:

• Recipient ownership: holder of the credential controls the record and can demonstrate its ownership.

• Vendor independence: once a record has been issued, usage and verification does not rely on any vendor.

The first consideration was to develop a platform that could issue records to any blockchain or multiple blockchains i.e. Sabhi is blockchain agnostic. We do not want to restrict institutions and individuals to the network they use to anchor their records, truly making these record persistent and independent of any intermediary.

Private trust-anchors like microfinance institutions, and telecommunication providers, currently hold the majority of identity data in emerging markets. These institutions also have staff that regularly interact with MSMEs. We will be partnering with these institutions to train their staff to facilitate the MSME onboarding and registration process.

To account for low connectivity environments, Sabhi IDs are designed to always store data locally in the device users smartphone. The system allows the users devices to connect through  non-cellular/non-WiFi means. For example, two devices may identify each other via bluetooth, NFC and/or a QR code.

We envision Sabhi becoming the one-stop-shop for MSME Economic Identity in Pakistan, and establishing a presence in other emerging markets, over the next five years.

We will be piloting Sabhi in June 2019, with EcoEnergy and affiliate Financial Institutions to onboard 5,000 customers. This will allow us to identify operational and infrastructure improvements needed to expand the Sabhi platform.

An open API will be released in January 2020 allowing digital services providers to integrate Sabhi IDs into their digital on-boarding process.

We aim to have 50,000 businesses, worldwide, on the Sabhi platform by 2022.

EcoEnergy

EcoEnergy (EE) is an off-grid energy provider, that provides solar energy solutions on flexible financing. We are providing the baseline infrastructure to manage and curate EEs customers identities. Onboarded business will have direct access to affiliate Financial Institutions through the platform.

Khyber Pakhtunkhwa Provincial Government (KP Govt.)

We are also closely working with the KP Govt. to onboard a cohort of technology startups onto Sabhi. This will facilitate their interactions with banks and investors.

United Nations Industrial Development Organization (UNIDO)

UNIDO is actively exploring Sabhi in their industrial value-chain development efforts, in Punjab Pakistan.

Sabhi is all inclusive, and so is the team that is making it possible. Our team includes experts from the fields of computer science, physics, finance, economics and psychology.

We have eight years of experience developing software solutions for some of the biggest brands across the world. We have worked in a diverse range of emerging technologies, such as Computer Vision, Machine Learning, Augmented/Virtual Reality. Most recently we developed an Educational Identity Platform on the blockchain.

Our experience and our multidisciplinary team give us the insight needed to solve the problem of Economic Identity.

We believe that Digital Economic identity will form the basis for most, if not all, economic interactions in the future. We, therefore, want to position Sabhi as the market maker to facilitate this process.

Sabhi has a multi-stream revenue model to allow it to be sustainable:  

• Fees/Identity transactions. Relying Parties will be charged for accessing user information, used in KYC processes. Fee-for-service and subscription packages will be implemented.

• Commission. A small commission will be charged for all Loans made on the platform.

• Consulting Fees. Non-recurring Engineering Fees for turnkey integration with relying party IT systems.

• Value Added Services to Relying Parties. In the long run Sabhi Baseerat (Viability Oracle), will be expanded to include comprehensive credit scoring and value-chain analytics. These services will be offered as value added features to relying parties.

• Value Added Services to MSMEs. In the long run MSMEs will be offered add-on analytics, invoice management and productivity tools on the Sabhi app.

• White Labeling. Certain aspects of the Sabhi protocol may be White Labeled for use by other parties.

• Sabhi Lending Platform. One of the long term objectives of Sabhi is to become a Non-Bank Lender for MSMEs in emerging markets.

We believe the only way to empower MSMEs in emerging markets is to breakdown the walled gardens built by institutions.

One of the key challenges in developing open platforms is finding the right partners/trust anchors to implement at scale. We are actively working to expand our partner network. The Mission Billions Challenge will allow us to reach a wider audience and give Sabhi the visibility needed to attract the right partners.

The biggest barrier for Sabhi is on-boarding trust anchors and relying parties.

Trust anchors need to be assured that becoming part of the Sabhi network is worth the effort. This is addressed by giving trust anchors a portion of the revenue generated when identity records, they have verified, are used.

Relying parties such as banks need to be convinced that the data on the Sabhi platform is reliable and allows for effective decision making. We hope to use data from a number of cross sectional pilots to prove to relying parties that the Sabhi platform is reliable.