BanQu – Financial Network on Blockchain creating Economic Identity for the unbanked


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In one of my previous posts, I discussed how startups in the Nordics were working with their governments to help refugees get on the social and economic ladder. With due respect to the work being done there, use cases of providing banking and payments capabilities to refugees, is a tactical short term fix almost. The real problem is that refugees do not have an economic identity. BanQu, led by Ashish Ghadnis and Hamse Warfa (an ex-refugee from Kenya) are trying to solve this problem. They are using proprietary blockchain technology to drive financial and social inclusion through economic identity for about £2.7 Billion unbanked people globally.

Between the two founders at BanQu, they have various stories to tell on why they embarked on this journey. Hamse Warfa was refugee himself from Kenya when he was 12. He lost his identity (not just a name), when he had to flee his country with his family. After twenty years, he now has a doctorate in public administration at Hamline University, left a job with Margaret A. Cargill Foundation to start BanQu. However the experience of being a refugee in the process made him realise the criticality of economic and social identity.

The average stay for a refugee in a camp is 17 years. This long duration of economic exclusion is compounded by high poverty settings that refugees live in, given that 90% of refugees come from regions considered economically less developed.

Ashish Ghadnis the CEO and Co-Founder of BanQu, is a serial entrepreneur. He sold his previous business in 2012, and started volunteering in Africa. During his charitable endeavours in Africa, he identified problems that many Africans face.

A woman farmer feeding a family of eight people at $300 a year, who has an acre of land on which she has been growing corn, and using the income to run her family for thirty years. This lady has no identity or financial history. But it is just common sense that she deserves financial inclusion and would be highly credit worthy. This is true for many women in countries like Myanmar, Bangladesh, Syria, Congo, Somalia, CAR, Burundi, Colombia, El Salvador.

True transformation, true inclusion, and true fairness and 100% worldwide inclusion in the global economy can ONLY come from a massive shakeup; a massive redesign that fundamentally changes the foundation of the world’s economy.

So how does BanQu provide economic identity using blockchain? In four simple steps.

  1. Create an identity for the unbanked on BanQu’s Distributed Ledger platform
  2. Onboard the banked, financial institutions and other financial stakeholders to BanQu
  3. Allow connections between the parties (banked and the unbanked) to build a mini financial network
  4. Create history of transactions on the platform, which would eventually become the economic identity of the unbanked, using which they can scale their access to various financial avenues.


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The integrated approach of using principles of Social Media and DLT in a financial context seems quite powerful. Some use cases BanQu are addressing are,

Remote Purchase: Say, A is banked and B is a unbanked friend/family living elsewhere. B can connect to A on BanQu.  This allows A to provide funding to B, which B can use to purchase goods from say C.

Funded Wallet: A could also remotely add funds to B’s wallet, and B can use this to purchase goods from C

Term Purchase: B purchasing goods from C could happen on pre-agreed terms, where payments can be spread over a period of time.

Remittance: Remittances can also happen using remote funding of wallets where, A can fund B’s wallet for a particular amount, and B can receive cash from C (instead of goods in the above case).

Credit Worthiness: All the above scenarios provide a track record for B to move from Unbanked to Banked. And over a period of time this could help B establish credit worthiness in the financial world.

Wearing my investor hat on, that’s too many use cases for a startup to handle so early in the game. And I often get sceptical and fear for the entrepreneur who starts with “I am going to change the world”.  But BanQu somehow feels right, honestly.

The real challenge is setting up the financial network infrastructure and bringing onboard a good mix of credible unbanked and helpful banked. Once this happens growth could be viral and the financial network could be used for endless purposes.

A case study as described by Ashish: If you’re a poor female farmer on the Tanzania-Rwanda border, feeding a family of eight or ten on $300 a year, which is less than $2 a day. At harvest, the broker says to her that unless she sells her corn to him at a price it will get wasted. The mother is forced to sell the corn because she has no access to information. She has no identity. But if she has a piece of land and has been harvesting crops for thirty years, she should be able to produce 100 kilos of corn. Then the U.N. has orchestrated buyer contracts for that 100 kilos of corn.

Using BanQu, this mother/farmer has three things which she never had before.

One: On her phone, through the blockchain and BanQu, she gets to know that her one acre land can help her produce 100 kilos of corn for which she has a buyer (the U.N.), even if the harvest is a few months away.

Two: If you dry the corn to 13 percent moisture content, the price of corn doubles. With BanQu’s technology, the mother has an identity, she owns a piece of land, has a produce forecast and a buyer. And that buyer is now going to allow her to get collateral to get a dryer so she can dry her corn. All that becomes part of her history.

Three: The blockchain has given her an identity created by her transaction history. She can now borrow as lenders can see  that she has a piece of land, a microloan, a harvest, a dryer and that she is selling them at market price.  If that Rwandan woman farmer has her identity in the blockchain and she has gone through three farming cycles, the lender would not charge her 30 percent on $100, but would charge her 4 percent on $100 because she has history.

This makes me wonder if the current financial system needs some very fundamental changes. So many products, with very high barriers to entry, which effectively ignore 2.5 Billion consumers. Surely, its time to go back to the drawing board, and may be, that’s what Banqu are doing.

Like most Fintech use cases of blockchain, this is still in pilot mode, and is yet to be proven as a viable business model. However, once/if it takes off, there is no reason, why this can’t become mainstream and create yet another leapfrog moment.

Arunkumar Krishnakumar is a Fintech thought-leader and an investor. 

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