“We're a for profit business, but it's advocacy at the same time. I mean, it's a beautiful regenerative model. It's an abundance mindset,” declared David.
Fintech promotes plastic currency to end poverty
At a glance
Amid the mounting pressure to save the earth, several companies are also trying to explore opportunities that combine social advocacy and at the same time earn from it. One of the first to come up with an innovative offer is Plastic Bank, a Canadian fintech.
Plastic Bank is looking at the Philippines as a hub for a business model that offers opportunities to poor Filipinos by becoming part of a global revolution in the fight against plastic pollution through the collection of plastic wastes for recycling purposes and earn via an online platform. The idea is that there is money in waste plastic packaging materials.
The Philippines had the largest share of global plastic waste discarded in the ocean in 2019, according to earth.org. The country was responsible for 36.38 percent of global oceanic plastic waste, far more than the second-largest plastic polluter, India, which in the same year accounted for about 12.92 percent of the total.
Plastic Bank CEO David Katz said his business model is an offshoot of the United Nations Sustainable Development Goals (SDG). It is trying to put in concrete action some of 17 SDGs.
The Plastic Bank is trying to address poverty, hunger and environment. David believes that the world cannot solve one of these SDGs without the other.
This fintech sounds more of the oft-beaten CSR concept, but make no mistake, Plastic Bank is a for profit business. David ventured into this advocacy because there is money in it.
“We're a for profit business, but it's advocacy at the same time. I mean, it's a beautiful regenerative model. It's an abundance mindset,” declared David during a select media roundtable.
The mechanics is simple. A collector of resource material, a politically correct term for plastic garbage, will just download the Plastic Bank app for free to become a member of this movement.
The collected plastic materials are brought and weighed at any of its branches. The transaction then is recorded and can be exchanged for hard currency or through e-wallets or deposited in their Plastic Bank account.
The company is also partnering with local government units (LGUs), junk shops, aggregators, and recyclers to create a whole ecosystem of plastic entrepreneurs.
The target is to ultimately “gamify” the collection of material through incentives.
“As you collect the material and you transact that material through us, we also collect all of that data, and we can substantiate your reliability. Over the course of time, at the press of a button, you can borrow money with no interest using plastic as a currency,” he said.
Plastic Bank now operates globally. It started in Haiti, Indonesia, Brazil, Egypt, Cameroon, Thailand, Africa, among others, focusing in areas where poverty is high.
In the Philippines alone, Plastic Bank has over 200 collection branches and over 36,000 members since David first introduced the idea in 2016 in Baseco.
For now, they only accept recyclable plastics, but they are planning to include sachets, the most problematic plastic packaging in the country, once the technology to recycle this kind of plastic becomes available.
David argued that if every piece of packaging, every sachet, every bottle was immediately exchangeable for P50 even, then nothing of these would be going into the ocean.
“But, we’ve lost value and sight to the material into life, into people, into things. We're a product of a generation that has been taught that life is disposable,” he lamented.
By putting value into what otherwise is a waste material, nobody would be throwing anything away anymore. “Everyone would segregate material in their house, every mom, every house would be keeping everything. It would be segregated. There'd be a high quality material. It'd easily be collectible. It'd be recyclable,” he added.
As a result, plastic has created a currency out of the material itself.
But collecting resource material has been so stigmatized. If someone looks at you recycling, it’s like “Oh, you must be poor.”
And that is a challenge because most people are brought up in a society where throwing stuff is like a status in society. “Because I'm so rich, I can throw things away,” could be the unspoken thought among the rich.
Last May 2022, Plastic Bank conducted a study in the Philippines and found out that collection members can earn a decent $100 to $180 a month.
The buying rate averages around P8 to P15 pesos per kilo, but a Plastic Bank member can earn twice.
Plastic Bank actually gives extra as they also extend health benefits and accident insurance because picking up trash could result in different circumstances.
“And we're still profitable doing all of this,” David reiterated.
The business model is gaining traction with big multinationals partnering with David as part of giving back to the society and the earth.
Plastic Bank can also serve as third party verifiers for companies for their plastic credits. It will give them all of the data through the blockchain so they can see the lives that have been changed through its platform.
“So, there's methodologies to gain profit,” said David.In fact, David is funding this venture alone.
“This is self-funded through growth and sales. And I've been doing it for ten years. I would say that the organization already probably invested $90 million,” he said.
In the Philippines alone, Plastic Bank has a team of 16 people.
David explained the need to create more for profit solutions that can perpetuate growth because “we can't donate to end poverty, we need to create self-perpetuating business models that build themselves, we need for profit solutions that will change the world.”
David would like even to move past sustainability or the conversation of sustainability to regeneration. “We have to begin regenerating and repairing the damage. That's what we're doing. It's a regenerative mindset. It's a regenerative business that builds value for everyone and to self-perpetuate its growth,” he said.
David sees a win-win solution by spearheading a global movement.“It's actually win win, everybody has to win. And it works because even the plastic wins. It becomes new again. Everything wins. The brand wins, the consumer wins, the ecology wins, the collector wins, the country wins. We win. The ocean wins, everybody wins,” he said, excited.
The regenerative business model is opposed to where the traditional business has been, where the conglomerate wins at the expense of everybody else. “I have to take and deplete for myself to win, which is crazy because there's even more value in creating abundance,” he argued.
This business model is to give the poor, which numbers over two billion globally, the opportunity to become entrepreneurs.
He believes that “when people experience what it is to receive, they'll also give.” He believes further this will eventually create a movement of people who have received so powerfully to continue to give.
Pursuing this kind of a venture is like chasing a dream, but David has been resolute, “I’m going to die trying.”