Coca-Cola, BanQu Launch Payment Platform for Informal Waste Reclaimers, Boosting Bankability
BanQu and The Coca-Cola Company delivering results.
June 09, 2021
Massive Milestone Over 1,000,000 kilos! | June 09, 2021
Waste reclaimers empowered! Real-world #circulareconomy! Using blockchain technology and partnerships to help break the poverty cycle across the globe.
Millions of people in Africa, Asia and Latin America make a living collecting, sorting and selling materials foraged from landfills, along streets and waterways or dumpsters. In some counties these waste pickers provide the only form of solid waste collection, helping to achieve high recycling rates. Yet, they often face low social status, deplorable living and working conditions, and get little support from local governments. The same holds true for women who grow crops like cassava on smallholder farms. Both groups are among the invisible hands serving the global economy. They have no way to prove how much revenue they earn, making it difficult, if not impossible, for them to open bank accounts, obtain working capital at reasonable rates and lift themselves out of poverty.
That’s where BanQu comes in. It is using blockchain technology and partnerships with governments, mobile payment companies and large corporates such as Coca-Cola and Anheuser-Busch InBev to help break the cycle. The collaboration is yet another example of how large corporates and young companies can team to help solve the United Nations Sustainable Goals.
“People in our supply chains are unbankable because they can’t prove they exist,” says BanQu founder Ashish Gadnis. The company’s slogan is “dignity through identity.” Its stated aim is to eradicate cyclical poverty and create a circular economy that gives economic equality to all participants. “By putting a human lens on the circular economy, we can solve both inequality and climate change,” he says.
BanQu is one of 17 start-ups participating in the World Economic Forum’s The Circulars Accelerator Cohort 2021. The accelerator is a collaboration with UpLink, the Forum’s innovation crowdsourcing platform, and is led by professional services company Accenture in partnership with Anglo American, Ecolab, and Schneider Electric.
The company’s blockchain technology ensures that everyone in the supply chain who participates in a transaction gets a fixed, reliable, transparent and secure copy. The app is live in more than 40 countries and more than one million people – including waste pickers, small landholder farmers and refugees – are active on the platform. “It is an ecosystem play,” says Gandnis. The system helps corporates with their sustainability goals. Waste pickers and small landholder farmers can prove their income, allowing them to open banking accounts, obtain loans and pay bills via their mobile phones, giving families the needed stability to keep their kids in school. “My dream is to get 100 million people on the platform and help lift them out of poverty,” he says.
Blockchain Is A Game-Changer
Gadnis has a deep understanding of what it takes to break the cycle of poverty. He grew up poor in India and found a way out by learning to code. When he came to the U.S. in 1994, he was able to get a bank account for the time “and the heavens parted for me,” he says. He created several startups, selling one to a large consulting firm. Wanting to give back he got involved with a Haiti earthquake relief effort and later did volunteer work with the United States Agency For International Development (USAid) in the Democratic Republic of Congo. He quickly realized that charity did not solve fundamental deep-rooted issues that keep people trapped in poverty. His eyes were opened by an encounter with a woman small shareholder farmer who had been successfully selling cassava and maize crops used by global brands for decades. A bank turned her down for a loan. “It made me realize these people were invisible,” he says. “After 30 years of growing crops she had no proof and was at the mercy of men in a male dominated society.” Gandnis quit his volunteer role and started investigating how he could use his knowledge of supply chains to help people at the bottom of the pyramid and came up with a solution based on blockchain, an immutable digital ledger.
“Blockchain is a game-changer for people at the bottom of the pyramid,” says David Drew, Coca-Cola’s Sustainability Director, Africa. Coca-Cola started working with BanQu in January and “we are innovating as we go,” he says. Around 600 waste pickers have already signed up to the platform in South Africa and more than 1,000,000 kilos of recyclables have been recorded.
BanQu’s approach gives Coca-Cola a solution to a tough problem. “Informal collectors are the backbone of collection and recycling in many economies, but their contribution is generally misunderstood and under-appreciated.” says Drew. As part of its global World Without Waste strategy, Coca-Cola is looking to step change the rates of collection of the bottles and cans it sells and, in particular in developing markets that don’t have the benefit of formal waste management systems. “Our goal was not only to understand the informal collection environment better and in doing so help to increase collection and recycling, but also to empower both collectors and small businesses trading in recyclables,” he says. It has proved challenging because in many cases transactions between waste pickers and buy-back recycling centers are not recorded or are being recorded by hand. The BanQu system offered a simple solution to securely record these transactions, not only giving waste pickers proof of income, but also serving as a kind of simple enterprise resource planning (ERP) system for buy-back centers. “Bringing transactions into a cloud-based system that provides small business owners with a new level of understanding of their businesses is incredibly powerful.,” says Drew. “Ultimately to achieve our goals we need these small businesses to be successful”.
The BanQu system will also assist Producer Responsibility Organizations (PRO) like PETCO, a project partner, better understand and support the buy-back centers. For example, during the COVID lockdown, South Africa placed a ban on alcohol. The absence of aluminum beer cans, a valuable recycling commodity, caused an enormous drop in liquidity in the informal trade. To address this, Coca-Cola ultimately contributed $200,000 in working capital to support to buy-back centers through PETCO. Without funds to trade, buy-back centers had insufficient funds to pay waste pickers and were turning them away, significantly reducing recycling rates. “We knew COVID was causing a massive interruption in the recycling value chain,” says Drew, but it took months to fully understand the impact. “What we realized is that if we had been using BanQu at scale we would have been able to see within a matter of days that something was going incredibly wrong and reacted more quickly.” he says. “Ultimately, through BanQu, we should be able to support the value chain financially both in times of crisis and even incentivize collection of certain materials in certain areas to improve collection rates.”
Coca-Cola is currently using BanQu’s system in eight buy-back centers in South Africa and now entering the second phase of the project, piloting the use of safe cashless payment systems. This will not only enable cashless payment between waste pickers and buy-back centers but provide waste pickers with the equivalent of a bank account. Coca-Cola is also investigating how BanQu might integrate with a South African government program to develop and maintain a national register of active waste pickers, in order to recognize their contribution in a more formal manner.
If the South Africa experiment to integrate BanQu into the informal collection and recycling sector is successful, Coca-Cola may consider rolling it out in other developing markets within Africa as well as potentially in Southeast Asia and Latin America, says Drew.
Giving Farmers A Fair Shake
Like Coca-Cola, AB InBev has started using BanQu’s technology to integrate waste pickers into the global supply chain. (It is using the system in Colombia and Zambia). AB InBev is also using the system to work with small landholder farmers. The company, which operates in over 50 countries, has agricultural development programs in 13 countries, working with large commercial farmers in countries like the U.S. and Argentina and small landholder farmers in countries such as Zambia, Uganda and India. “We have set an ambition to skill, connect and financially empower 100% of the direct farmers in our supply chain by 2025, and BanQu is a key enabler to achieving financial empowerment with smallholder farmers,” says Katie Hoard, AB InBev’s Global Director of Agricultural Innovation and Sustainability. The company first tested BanQu’s technology in Zambia in 2018 and “we were really impressed with BanQu’s ability to scale and the level of adoption,” she says.
In Zambia AB InBev agreed on a crop price for farmers with aggregators only to find out from farmers that this was not what they were being paid. “BanQu helped us ensure the price the farmers were being paid and also allowed us visibility into when they were being paid,” says Hoard. It also helped the company better manage the quality and volume of crop inventory. In 2019 mobile money was added into the mix. The first woman to use the system, a cassava farmer, received a text message saying that she had been paid in mobile money for her crop and a few moments later got a second message telling her she could now pay her solar energy bill using her mobile money account. While there are clear advantages of no longer stashing money under mattresses and having to use cash to pay bills there are still barriers to digital economies in some African countries, says Hoard. Challenges include cash out fees, network access, phone ownership and availability of banks and agents in rural communities. “We need to look at how we address these challenges collaboratively, but BanQu has proven the benefits of this model,” she says. The company has rolled out the technology to other agricultural supply chains in Uganda, Tanzania and Brazil and is looking to expand globally. She praises Gadnis’ energy and dedication. “Ashish’s vision and his unrelenting focus on what he wants to get done has been the strength of this program,” she says. “He engages with everyone from our teams in the field to our leadership to make them see what the possibilities are.”
Serving small landholder farms and waste pickers is just the start, says Gadnis. He is hoping to convince more multinationals to use BanQu’s technology. The system can be applied to any kind of sourcing in emerging markets. By expanding supply chain information to include everyone who contributes raw materials – whether it be crops or mined resources – companies can not only ensure everyone is being paid equitably, they can prove no child labor is involved. “Some CEOs may be afraid to find out,” says Gadnis, “but we need companies to step up and make their supply chains more transparent, more equitable and more humane.”Connecting Business with Technology
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