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Tala is a global technology company building the world’s most accessible financial services. More than 6 million people across Kenya, the Philippines, Mexico, and India, have used Tala products to start and expand small businesses, manage day-to-day needs, and pursue their financial goals with confidence. Tala has raised more than $350 million from visionary investors including Upstart, the Stellar Enterprise Fund, RPS Ventures, the J. Safra Group, IVP, Revolution Growth, Lowercase Capital, Data Collective VC, ThomVest Ventures and PayPal Ventures.
We’re focused on designing services for people who don’t have access to quality credit, savings, insurance, or payments products – an estimated 3 billion people globally. Typically, these are small business owners or salaried workers who, despite some financial stability, aren’t seen as trustworthy by traditional institutions.
All Tala services are provided through the Tala app. While loans are traditionally given based on someone’s formal lending history through a bank or their credit score, Tala is able to skip that formal history by looking at data from an applicant’s smartphone to trust customers with loans and other services. When a customer downloads our app, he or she fills out a simple application while our models analyze the data customers share with us. If approved, the customer receives their loan offer in just a few minutes. Loans range from $10 to $500, with terms of 21-90 days and transparent, one-time fees. In addition to credit, customers can now access Tala’s account experience, which provides savings and more.
Tala works in markets where credit bureaus are limited or non existent. Instead, our underwriting models use machine learning to analyze data that customers elect to share with us via their smartphone. We look for patterns that prove consistency to indicate potential creditworthiness. Once a customer has taken a loan with us, his or her repayment behavior is the most important factor for future lending decisions.
Some examples of data points Tala might analyze include:
App usage. For example, someone who’s using a lot of apps and data can likely afford the associated data charges – this gives us a sense of their capacity.
Loan application behavior. We’re able to distinguish customers that are actually taking their application for credit seriously by noting the thoroughness of their responses.
Note: Tala will never sell customer data. We will also never share customer data other than to comply with legal obligations (read our data ethics policy here).
While working for the United Nations Population Fund, Tala’s CEO and founder, Shivani Siroya, interviewed thousands of people across India, Sub-Saharan Africa, and other emerging markets to study the impact of microfinance on their lives. She noticed the biggest obstacle to broadening financial access was lack of data – without data on underbanked populations, banks couldn’t make lending decisions or design financial products that fit people’s lives.
Shivani started lending to some of these individuals out of her own savings, and in doing so, realized she was using details from their daily lives to decide who was creditworthy – not traditional financial indicators. As much of this same daily life data sits on consumers’ mobile phones, she decided to build an app that could capture data customers shared with us and turn it into a credit score. Tala then started issuing unsecured loans to people in Kenya in 2014, proving their creditworthiness.
Tala is committed to expanding and promoting financial health by providing responsible consumer finance tools to those underserved in the current financial system. Our product development process heavily emphasizes co-creation, and includes our customers at every stage. We start with customer interviews to fully understand their unique needs, followed by multiple rounds of design and feedback to guide us toward a successful solution. Tala has research teams in every office globally.
Tala charges a one-time fee per loan. This fee is calculated as a percentage of the principle and is priced dynamically for each customer. The majority of customers start at 15%, and are eligible for fees as low as 4% as they build their credit history with Tala. The fee does not roll over or compound. For customers who are late or wish to extend their loan beyond the original due date, we charge a one-time 8% extension fee. No other fees will ever be charged to the customer, regardless of when they repay.
As an example: if a customer takes a $100 loan for 30 days with a 15% fee, they owe $115 at their due date. If the customer wishes to extend their loan term, they owe $123, regardless of whether they repay at day 38 or day 365.