Our solution's stage of development:Growth
Around 2 billion people around the world are financially underserved. They’re hard to serve in part because they don’t have a documented financial history, or credit score. Tala has developed an Android application that builds financial identities and delivers instant credit to populations in Kenya, Tanzania, and the Philippines.
Tala is a mobile technology and data science company that’s building financial identities for underserved people in emerging markets through alternative data and instant credit.
Upon downloading the app from the Google Play store, the customer can apply for credit for business or personal use. After granting access to the data on their device and answering a few short questions, customers learn whether they have been approved for credit. Customers do not need collateral or paperwork to apply; the decisioning is done using only the data on the device. As borrowers exhibit reliable repayment behavior, their ability to take larger loans increases.
Tala was the first company to lend via smartphone app in Kenya - a groundbreaking approach that has since become industry standard. By looking beyond traditional indicators, Tala is able to open credit to people who have been excluded from the formal financial system. The ability to apply for and receive credit on one’s mobile device fits frictionlessly into any lifestyle – undoing bias that a potential borrower may encounter in face-to-face lending. Tala also helps these borrowers move into the formal system by positively reporting repayment behavior to Kenya’s Credit Reference Bureau, so that customers can begin to build a financial identity and access services from banks and other formal lenders.
According to McKinsey, there is a $2.1-2.5 trillion unmet need for credit in developing markets. Banks and other traditional institutions aren’t positioned to meet the capital needs of the underserved due to the aforementioned lack of financial data on these populations. Credit can help underserved individuals support their families, smooth income gaps, weather hardships, grow their businesses, and gain control over their financial lives. Yet without a way to prove their financial potential, too many of these individuals are left with choices that are inconvenient, unaffordable, and not tailored to their unique needs – or with no choice at all.
Why our solution will solve the problem:
Tala aims to be the indispensable tool for the financially underserved in emerging markets. Tala will utilize its robust data science capabilities to help determine financial services that customers need but cannot access (bill-payment assistance, insurance procurement, and point-of-sale financing).
Tala’s success will coincide with fundamental quality-of-life improvements for the world’s underbanked. By putting everyone on the same playing field, we can unlock the trillions of dollars in untapped potential in these markets and build a stronger global economy that doesn’t leave anyone behind.
Our target outcomes:
By looking beyond traditional indicators, Tala includes people who have been excluded from the formal financial system. The ability to apply for and receive credit on mobile device fits frictionlessly into any lifestyle, undoing bias that borrowers may encounter in facetoface lending. Tala also helps borrowers move into the formal system by reporting repayment behavior to countries Credit Reference Bureau. Across all countries, Tala has made 2 million loans to ate. Our success can be seen in our 92% repayment rate & 95% of customers repeat. 58% of customers use their loan for business purposes; 9% education; 6% emergency.
The populations we will benefit initially:
The regions we will benefit initially:
The technologies we employ:
Why our solution is unique:
While Tala’s ability to score customers based on their smartphone data and disburse loans instantly is innovative, its various customer identity and network models distinguish it from other data and fintech companies. Based on thousands of data points that Tala receives from customers’ smartphones, it is able to identify traits associated with good and bad borrowers. It can even tell, solely based on the phone numbers in a customer’s phone, which contacts would be potential customers worth pursuing. As the platform grows, these advantages in data insight and application will grow alongside it.
Why our solution is human-centered:
Tala spends significant time speaking with our customers in order to better understand our impact. We have heard from many customers who have been able to borrow from traditional lenders due to their newly documented financial history. For example: Jenipher, a 65-year-old food stall vendor in Nairobi, has been borrowing with Tala for nearly 2 years. In that time she’s saved enough money to open a second food stall and is also starting her own restaurant. Recently, she applied for and received a small business loan from a bank, thanks to the positive credit history Tala helped her build.
How people will access our solution:
Tala is available as a free download on the Google Play store.
Technology-Readiness Level:9 (Commercial)
How we will sustain our team financially:
Tala has raised over $44M in venture capital from leading venture and impact investors, including a recent $30M Series B round led by IVP. Tala’s credit portfolio in Kenya, which became profitable after only 2 years of operating the current product, provides a model for growth in other markets. Tala’s proprietary credit models and data sets distinguish Tala from other competitors in our markets and position Tala for long-term stability and continued success.
How long we have been working on our solution:5+ years
How long it will take to develop a pilot:We have already developed a pilot.
How long it will take to scale beyond our pilot:We have already scaled beyond pilot.