A lot of people, companies, and consortiums are trying to make blockchain a viable business. There are proof of concepts, innovation labs, and tinkers with promising ideas (and results). But everyone keeps waiting for the sustainable, viable, in production blockchain business. Who can figure it out?
What if I told you there was a real, live, revenue-generating, blockchain company with customers. What if told you it was growing? Not only that, what if I told you that this company’s business model is serving the world’s most disadvantaged people – refugees, the unbanked, and the extremely poor? This company exists. The company is BanQu.
BanQu’s vision is creating dignity through identity. At its core, BanQu leverages blockchain to bring transparency to the first and last mile of economic activity, enabling anyone in the world to prove (and own) their identity, their economic history, and their network. Over the last eight months, we at LTP have had the privilege of getting to know the BanQu Team and its co-founders, Ashish Gadnis, Jeff Keiser, and Hamse Warfa. We recently sat down with Hamse to understand BanQu, in the words of a co-founder.
LTP: Hamse, thanks for joining us. What is the problem BanQu is trying to solve?
Hamse Warfa: The problem we are solving is the complete socio-economic exclusion of 2.5 billion people who are unbanked/underbanked, including the 67 million refugees and displaced persons. In the developed world, having a national ID or utility bill can serve as proof of your identity. It also helps verify your economic history, sending signals that allow banks to build a credit profile. Imagine if you were forced to flee your home and had to live in a refugee camp. You have no identification, no academic credentials, no proof of creditworthiness, and no assets.
A refugee’s identity is reduced to a registration number, an ID tag that allows him/her to get daily rations. It’s important to recognize that a refugee’s status is not transient; the average stay for a refugee in a camp is 17 years. This long duration of economic exclusion of refugees has been compounded by the fact that about 90% of refugees come from regions considered economically less developed.
For years, I existed to the world as a number. A block of ink coded into a computer – a statistic that regulated the dispersal of rations and care. This was my only verifiable identity while I was a refugee in Kenya. As refugees, we were completely excluded from the global economic system.
The problem is getting worse. The number of refugees is increasing at historically unprecedented rates, making the provision of emergency aid and livelihood opportunities by concerned organizations a formidable challenge.
LTP: That’s a BIG problem to solve. What is the solution BanQu provides?
HW: We designed a software solution that provides unprecedented possibilities for refugees to directly participate in the global economy. Our platform integrates seamlessly into existing payment gateways and allows refugees to manage their online presence, connect with markets, sell goods and services, receive payments, and build a transaction history along the way.
We provide permanent economic empowerment, focusing initially on the millions of refugees worldwide and we’re expanding to include the 2.5 billion excluded from the global economic system. Our theory of change is that empowerment through the establishment of an economic identity leads to financial inclusion, contributing to overall GDP growth and improving efficiencies in leveraging global Diaspora and philanthropy capital.
LTP: Can you expand on BanQu’s solution? Specifically, what blockchain has enabled and how that makes BanQu possible today?
HW: We believe that lacking a source of identity is at the heart of the problem that refugees face. Our idea is to create an "economic Identity" through blockchain-based identity platform accessible through any connected device. This is an immutable, encrypted, and verifiable source of identity that refugees can also use to access financial systems and build up an economic history. We achieve this by leveraging blockchain technology, in particular, the decentralized ledger aspect, coupled with the high rates of mobile penetration in refugee zones.
Building on blockchain’s permissioned private distributed ledger architecture, our solution provides critical features that address the lack of economic identity and allow refugees free and fair access to the global economy.
- Immutable. We build a human characteristic profile, what we term as a “selfie ID” that is accessible without physical documentation.
- Trust Networks: Systematization of community and family networks. This creates a true, human-centered investment path into fragile economies, and connects refugees with the diaspora and philanthropy capital.
- Asset tagging: The platform allows refugees to add artifacts to their identity and provides proof of ownership like livestock, academic certificates, health records, and labor certification.
- Portable: Our solution enables true, cross-border retention of identity. BanQu provides deep insights into the characteristics of refugees, and allows aid agencies to better coordinate and improve supply chains, resulting in the efficient provision of emergency relief, and health care. It allows a person to truly own their identity.
There are two key benefits that our platform provides. First, we are challenging top-down approaches to working with refugees by creating an ecosystem that is based on identity, trust, and community. The BanQu approach allows users to control their network and select who they interact with and the level of interaction.
Second, the platform allows refugees to record, secure, and document non-monetary identities and monetary histories, as opposed to a centralized, corporate-controlled database. We leverage this to allow refugees to access financial services, understand their spending behavior and monitor their savings.
LTP: The question that will be to of mind for many readers will be, “Okay, wonderful story. But what’s your business model?”
HW: BanQu will be free for refugees and the unbanked. Our take is that profitability is secondary to our social impact. As a social enterprise, for-profit company, we earn our revenue by providing a platform for real-time monitoring and evaluation for aid agencies, social enterprises, governments, NGOs, as well as from firms such as banks seeking KYC-compliant (Know your Customer) client base with a verifiable transaction history.
Additionally, BanQu’s trust network technology lends itself well for scaling up without additional cost, as refugees connect with their families to remit money and to save.
LTP: Can you explain the origins of the company?
HW: Established in 2014, (incorporated in 2016) BanQu’s ideation came from initiatives to leverage Diaspora Capital to replace scarce and infrequent cash aid. In visits to the Dadaab Refugee Camp, where I spent three years and a half as a refugee myself, my co-founders and I interacted with refugees that started their enterprises, despite the lack of affordable capital and in a highly constrained business environment.
We quickly realized that demand-side policy problems could not be solved by supply-side solutions. We need a means to allow refugees to take ownership and marshal the resources they need.
This paradigm shift in thinking led to the ideation of BanQu. Our primary partners are the refugees that are the heart of it all.
LTP: What’s next? What are the near-term milestones you are working towards?
HW: Our most immediate is to provide a digital, blockchain-based identity and build economic transaction history to thousands of refugees and/or individuals in extreme poverty zones who are unbanked/under-banked with a focus in East Africa and the Middle East. We plan to connect refugees interested in starting enterprises or selling services (e.g. translation services/data entry) by helping them get an online presence that allows them to enter into contracts and receive payments for transactions.
LTP: Thank you so much for joining us, Hamse, and we look forward to covering BanQu’s continued success.
[UPDATE] BanQu and Eastern Congo Initiative are proud to announce an innovative pilot program to fundamentally improve the lives of farmers in the Democratic Republic of Congo (DRC). Learn more about the program here.