Globally, someone was displaced every two seconds in the last year, according to the UN. Fintech companies and the financial inclusion industry have a significant opportunity to help refugees and internally displaced individuals get the tools they need to build new lives for themselves. One of the companies taking on this challenge is Leaf. They’re creating integrated virtual financial services to help refugees manage their assets and identity securely and efficiently, and they’re tapping into resources including blockchain and digital currency to support these services. Accion Venture Lab sponsored Leaf for a grant award and technical assistance as part of Catalyst Fund, an inclusive fintech initiative. We selected Leaf because of their potential to make a difference for the people who need help the most. We interviewed Leaf co-founders Nat Robinson and Tori Samples about how their company supports refugees.
Q: What inspired you to start Leaf?
A: There are two billion people around the world without access to financial services, 68.5 million refugees, and more than 140 million people who could become displaced in the coming years. That is a substantial problem with no easy solution. Nat spent seven years starting and running microfinance company in Kenya, and Tori has worked with refugees for almost 15 years. Our combined experience has shown us how powerful the role of financial security is in many facets of life, especially for vulnerable populations such as refugees.
Q: What are the unique financial challenges that refugees face?
A: Carrying cash (and in many cases, a life’s savings worth of cash) across borders — in the presence of criminals and opportunistic border guards — is very risky. Even if successful crossing the border, a refugee will need to find somewhere to convert that cash to the local currency and pay exorbitant fees to money exchangers. The loss of value and time in trying to protect those savings is something many refugees can’t afford. Refugees also often rely on international remittances to keep them financially secure. However, the current money transfer system is inconvenient, expensive, and sometimes puts the refugee in danger.
Q: How can blockchain technology help solve these challenges?
A: Blockchain can facilitate small, low-cost, cross-border movement of assets much better than current systems. Transactions are also almost immediate, which is important for refugees who cannot afford to wait hours or days for a money transfer to go through. Refugees benefit from the balance of transparency and anonymity/security afforded by blockchain. Blockchain also reduces the trust barrier for institutions working with Leaf’s services. Blockchain is just one part of Leaf’s ecosystem but works nicely for this specific population and use case.
Q: You’re building a mobile-first platform. Why are mobile phones an effective tool for bringing financial services to refugees?
A: Mobile phone penetration in many of the markets we are exploring is above 80%. Additionally, mobile money accounts are fast outpacing bank accounts. Mobile phones are the platform of the future for financial services, especially for populations fleeing conflict around the world. Mobile phones are often the only way our customers can maintain any connection with their previous life. Due to the limited penetration of smartphones in our markets, it becomes important for us to offer mobile services that are not dependent upon a smartphone or data.
Q: In the past year of building the company, what have you learned about making an impact for vulnerable populations?
A: We have learned that vulnerable populations are mostly made up of people just like us who have been put in incredibly difficult situations. The world often underestimates them, but they survive and figure out how to get by, often through relying on strong family networks dispersed throughout the world. Trust is obviously important in these communities. Credibility created through prior experience and willingness to learn goes a long way. We are extremely grateful to work with this population and continue to learn from them every day.