Leaf Wallet: Digital financial services for refugees and under-resourced communities
Leaf is changing people’s lives by bringing the latest in financial services to under-resourced communities and excluded groups around the world. Even without a personal banking history, institutional financial literacy, a passport, or a smartphone, Leaf helps people save, send, receive, and exchange, and pay money directly to and from their phone.
Blockchain-backed and accessible from any mobile phone (smartphone and feature phone), Leaf offers the safe storage and transport of money across borders.With Leaf’s cross-border, digital wallet, users can store money in one or more currencies, enjoy free Leaf-to-Leaf transfers, pay for goods and services (regardless of whether the merchant has a Leaf account), and automatically exchange currencies during transactions.
Customers can cash in from any mobile money number in East Africa by requesting funds, even across networks and borders. When they are ready to cash out, they can send money to any mobile money account as well. Customers can do all of this with a smartphone or on a basic phone using a USSD shortcode that does not require an internet connection.
Nearly two billion people around the world are unbanked and lack access to formal financial services. For refugees, migrants, and cross border traders, this is particularly challenging because they have no safe or reliable way to bring their money across borders or an affordable way to send and receive money, leaving them vulnerable to high exchange rates and theft. The ability to fully use the Leaf wallet, even in areas of low connectivity, is essential for serving the ‘last mile’ and providing true accessibility.
The importance of reliable financial services, especially for those most excluded, cannot be understated.
Refugees often struggle to earn steady incomes and meet basic needs. The benefits of increasing savings for vulnerable communities are well documented. Research shows that having increasing savings and access to cash enables refugees to invest more in productive activities such as starting businesses, strengthens their resilience to shocks, and even increases their access to healthcare and education. Leaf aims to profoundly change the lives of refugees and migrants around the world, who can now both move securely with their money and save more money, empowering them to invest in their future, often for the first time.
Leaf can also be used for international remittances so that refugees’ friends and family are not charged exorbitantly high transfer rates when sending money home. In the process of using Leaf, customers will create a documented biometric and economic identity that they can use it to establish themselves in a new country. In addition to Leaf’s existing functionality, we will grow with our customers by offering micro-loans to users who have never had access to credit to start businesses and generate income. Leaf is designed to economically support refugees at each phase of their journey, empowering them to have financial security and freedom.
Many refugees rely on remittances but lack a way to receive them safely. Point-to-point cash transfer companies are often the only option for sending money across borders but charge up to 20% in fees and still leave the refugee carrying cash. Despite the high fees and inconvenience of having to pick up cash, most refugees still default to this option when receiving remittances because they know of no other way to get money across borders. Leaf is able to provide a digital solution for storing and transferring value without requiring a smartphone or charging prohibitive fees.
IMPACT ON THE YOUTH
We have engaged youths with smartphones to become semi-formal sales agents, equipping them with training and experience in addition to income. Of the 26 million refugees globally, half of them are under the age of 18. To date, 22% of Leaf users are 21 years old or younger. This younger demographic has the potential to introduce digital financial services to members of their family and community who have never had access to such tools before. Because the younger generation is typically more technologically savvy, they will help their families’ financial future by securing funds, saving money on remittances, and improving overall security by reducing cash on hand. Leaf has an expanding semi-formal sales agent network composed of younger individuals. Leaf equips these agents with a formal training program and a consistent flow of income that can be generated in their spare time when not in school or working. Leaf’s in-app financial literacy training will guide young users to become more financially responsible regarding their service choices, budgeting, saving, and how to responsibly access and utilize credit.
Leaf uses the Stellar blockchain for storing transaction data and value in stablecoins. Stellar acts as the source of truth because it cannot be manipulated. While not every blockchain would be a good technological fit for Leaf, Stellar–developed for cross-border payments in emerging markets–allows Leaf to provide cheap, fast transactions to a population that requires both high security and transparency.
Using a public blockchain ensures Leaf is 100% transparent and traceable but not identifiable back to individual customers. By doing all transactions on the blockchain, the possibility of Leaf being able to defraud its customers or lose track of funds is eliminated. Anyone can see every cent passing in and out of the Leaf ecosystem. However, customer identity is never exposed and identifiable information is never posted to the blockchain.
Storing value at the token layer in stablecoins opens up the benefits of blockchain-based transactions without exposing users to volatility. These stablecoins are what allow Leaf to efficiently process very small transactions across borders. Settlement costs are nearly zero and assets can instantly and freely move between the countries Leaf supports.
Transactions on Stellar are completed in 3-5 seconds and cost a fraction of a penny. There is no environmental effect as a result of energy consumption. In the future, Leaf can open its system to be interoperable with other Stellar wallets and potentially across chains, allowing users to take full advantage of global blockchain systems. Current legacy infrastructures such as MoneyGram and Western Union charge the customer up to 33% for cross-border transactions under $10 USD. With Stellar, Leaf can provide the same services
for 4% or less.
The beauty of Leaf’s blockchain design is that it does not impact the customer experience. No understanding of complex technical systems is required. Users transact in tokenized versions of currencies they already know and trust (currently RWF, KES, and UGX). Blockchain facilitates all transactions and improves Leaf’s security and efficiency without complicating the user experience.
ON BEING OPEN SOURCE
The majority of blockchain platforms are open source and benefit from the support of growing developer communities that are passionate about solving some of the world's toughest challenges.
We align with this ethos and see great value in building an open source community around our solution with UNICEF. We hope to also benefit from the agility of open source development and the ability to solve difficult technical problems through diverse perspectives. We are particularly excited to build a lending application that
can be replicated and deployed globally to help refugees and migrants in geographies all over the world.
Nat, CEO of Leaf is the former CEO and founder of Juhudi Kilimo, which provides micro-asset financing to rural smallholder farmers in Kenya. Tori (CTO) has worked personally with resettled refugees for 15 years and was previously a Data Architect at a Fortune 75 company, managing data for 180 hospitals. The rest of Leaf’s team has expertise across technology in emerging markets, refugee and migration issues, compliance, and foreign exchange. The Leaf team has helped the company win awards from the Vatican, the UN, the National Science Foundation, and Fast Company for its early progress with a live product in East Africa. Team members also include refugees and crossborder traders who have experienced financial exclusion and have struggled to open a bank account because of structural barriers, like Leaf’s target customers.
Leaf strives to be diverse across many identifiers. The Leaf team is comprised of people from different continents, races, and backgrounds. Leaf’s co-founder and CTO is female in the traditionally male-dominated fintech space. The Leaf hiring process prioritizes diversity in the hiring process as well; the broader Leaf team is made up of 60% women, 70% BIPOC, 20% refugees, and the majority of the team is East African. Leaf’s expansion model is centered around hiring locally as we expand and create opportunities for employment in underserved markets. This policy will apply as we expand into other markets, and we will continue to prioritize and advocate for women, people of color, and other underrepresented groups.
Diverse perspectives always lead to a better product, team culture, and strategy. It takes work to make everyone feel heard and comfortable but forces the team to be more empathetic. As a company geared towards the vulnerable, this is essential internally and externally.
As Leaf has expanded to new markets, countries, and continents, we have prioritized hiring locally. The diversity implemented in our expansion model allows us to understand cultural differences by nation and on a smaller scale, by city or village. Leaf has found that communities fragmented by trauma tend to rely even more on relational trust than normal communities. The Leaf team has worked with refugees for many years and integrated in various refugee communities for a long time. With employees that are trusted and familiar with Leaf’s potential/existing customers, we are able to collect feedback and adapt our product and marketing to fit their exact need.
Over the next 12 months, Leaf plans on using the UNICEF Venture Fund investment to expand to three new countries in Africa and integrate with a major financial institutional partner to use retail locations as Leaf cash-in/out points. Leaf will also lay the groundwork for Latin American operations, expand to resettled refugee populations, and begin testing micro-loans with initial users. At the end of the year, Leaf anticipates directly impacting 23,847 users and indirectly impacting the lives of 119,236 more. With this new traction through UNICEF, Leaf anticipates raising a seed round of follow-on investment.
We are thrilled to be part of a cohort of startups working on similar challenges around the world. We welcome the opportunity to collaborate and are excited to share experiences with other companies. We are particularly interested in how other companies are tackling the challenges of digital literacy, financial literacy, and delivering market-appropriate content to young people around the world. We have seen a tremendous opportunity to both employ and provide services to the young populations who have been excluded by the formal sectors. We understand the potential of young people in terms of digital connectivity, especially in relation to finance; they can help protect their families' futures by helping to earn and securely save money. We have engaged youths with smartphones to become semi-formal sales agents, equipping them with training and experience in addition to income.