With a simple mission, this startup company is building a financial service powerhouse in emerging markets including Africa. Tala has a goal to build a world where underserved people everywhere have financial access, choice and control.
Saved By A Loan
Peris and Betsy applied for their first loans from Tala while still in Kenyatta University. These two had hopes of getting their clothing business off the ground and make more income to live while in school. They had heard of Tala, the lending app, and decided to download it.
“Between us and poverty, we had about 200 shillings,” Kimeli said of her early days starting their business. “We were like, what are we going to eat? Our parents said, ‘No. We’re not going to send money… You go figure it out’ So we went and we did that.”
Minutes after applying for a loan, they both received $15 equivalent to 1,506 shillings. Peris and Betsy took that $15 loan and went to Nairobi’s famous secondhand market, Gikomba, where they bought 15 dresses at 100 shillings each and resold them in dorms and hostels for 200 shillings. The duo said two clothes remained but that wasn’t much of a problem, they had made 7000 shillings from selling the rest.
“We borrowed again — this time we borrowed 3000 [shillings] — we went out and bought some more dresses, and that’s how we’ve been.”
The Lending App
Tala is a company that sees the world differently. Currently, with branches in USA, Kenya, Philippines, Tanzania, Mexico and India, the company’s maiden product is a consumer lending app that underwrites customers in real time using thousands of alternative data signals. Anyone with an Android smartphone in any of Tala’s above-listed markets can apply for a loan and receive an instant decision. According to Tala, the decision to grant individuals loans is regardless of their financial history.
Now in its fourth year, Tala has already distributed around $300 million in loans to 1.3 million borrowers like Kimeli. The company plans to continue expanding its geographical reach and range of financial services, thanks in part to $65 million in new financing from billionaire-backed investment funds like Steve Case’s Revolution Growth fund.
“We see Tala as a company building the future of finance. They have quickly become one of the leading mobile-first lenders in emerging markets where well over 3 billion consumers do not have access to traditional banks,” says Case.
CEO of Tala
Shivani Siroya, the founder and chief executive officer at Tala, knows just how important — and transformational — outside investment can be for individuals in emerging markets.
Siroya was introduced to the power of financial independence working with the United Nations Population Fund. She launched Tala in March 2014 to create a mechanism for providing credit scores to financial institutions. This was so that undocumented women could get the loans they needed to become financially independent and entrepreneurial, she says. What Tala’s founder quickly realized was that the easiest way to create credit scores that other financial institutions would recognize would be for Tala to start issuing loans itself.
Unavailable on IOS
The app is currently available for only android devices. It works by collecting data on texts and calls, merchant transactions, overall app usage, and personal identifiers on a mobile phone to create an instantaneous profile of its potential borrowers. Customers simply download the app, apply for a loan and receive a decision in seconds. Most Tala borrowers, actually receive their credit in less than 10 minutes.
Tala’s borrowers are usually paying back the loans within 30 days and the company charges an 11% to 15% interest on the money it disburses.
The Ghanaian Lending App, Fido, is well on its way to becoming Tala’s competitor once the app launches in Ghana.