Tala’s Five Years of Expanding Financial Access in Kenya

Ivan Mbowa, Tala’s Regional Growth Manager

Tala is a mobile technology and data science company that delivers instant credit via smartphone to underserved people in emerging markets. It has a mission to expand financial access, choice and control for   3 billion people globally.

It developed an app that uses alternative data to score customers in real-time, without a need for formal credit history. Anyone with an Android smartphone in our markets can apply for a loan and receive an instant decision. Tala provides fast, personalized loans to approved borrowers and help customers establish their financial identities over time.

In the following interview with StartUp Magazine, Ivan Mbowa, Tala’s Regional Growth Manager talks of its progresses, successes, innovations and what to expect in the years ahead.

What was your mission at the outset?

Our mission is to expand financial access, choice and control for 3+ billion people globally.

How can your solutions be accessed?

 When a customer downloads our Android app from google play store, he or she fills out a simple application while our models analyze their phone data to determine creditworthiness. If approved, the customer receives their loan offer in just a few minutes. The offer is customized based on their score.

Once a customer accepts our credit offer, the loan is disbursed to their mobile wallet in under five minutes in markets like Kenya where mobile rails are prevalent. In cash-based markets like the Philippines, customers typically receive their loan within 1 business day and have a choice of disbursement channel including a cash payout.

Customer service is handled digitally, through social media, in-app messaging, or email.

What areas of interest do you target with your financial solutions?

We’re focused on helping the emerging middle class – largely underserved populations that are nonetheless leading creditworthy lives outside of the formal economic sector. Often they are small business owners or salaried workers who, despite some financial stability, still don’t have access to quality credit, savings, insurance, or payments products.

Why do you think you are best suited to serve the regional market?

Being Pioneers as non-bank lenders, our mission is the key driver in building our strategy that in effect places us in the forefront of providing financial access, choice and control, not only in the region but to the underserved. This involves:

  • We are committed to building – not moving fast and breaking
  • What that means practically is that we take a long view of our business. We know sustainability is key and so we work to ensure that our customer base is healthy and growing with us over
  • We also invest in a lot of effort – such as research and industry engagement – outside of the product.   o We are a founding member of Kenya’s first digital lender’s association – in partnership with 12

other lenders, we are trying to self-regulate and set an example for the industry.

  • We are committed to understanding and measuring our impact and engage in annual impact studies with our in-house research
  • We also work with third parties on additional research that enhances our product offerings. A good example of this is our work with CFSI (now the Financial Health Network) to develop a financial health score for developing populations. They had done this for the developed world, but not for emerging
What major milestones have you achieved so far?
  • 5 years of operations in Kenya
  • Total fundraising to date – more than $200M ( Currently just Raised our Series D $110M)
  • Total origination – $1 billion
  • Total customers – 4 million
Tala is now five years old. What does this mean for you? Your clients and the industry?

There still is the opportunity to serve the underserved and for us we continue with the journey of innovation and building of products that will provide financial inclusion. Beyond that we are so proud to partner with such incredible, diverse customers in their financial journeys as they seek to achieve their set out dreams and goals. As part of our 5-year celebrations, we will be launching a Tala community with free online courses to help our users connect and learn.

Have you faced any unique challenges in your course of operation? If so, how have you mitigated them?

Like any startup with a novel idea, Tala faced the challenge of trying to prove that this revolutionary model of providing credit to individuals based on alternative smartphone data was viable. We mitigated this challenge by continuously iterating our data science models and radically trusting our clients with increasing credit limits until we reached our current milestones such as a 90% repayment rate and over $1 billion disbursed in Kenya and beyond.

From your experience, what would you say are the key ingredients of running a successful fin-tech firm?

I believe that the combination of a relentless customer-first attitude and the inspiring challenge associated with trying to create a financial ecosystem to serve the global emerging middle class has helped us attract the world’s best talent that ultimately drives our success.

What would you say has been the greatest impact of your financial solutions?

We published our first ever impact study that found that Tala’s loans have been key in helping people smooth their income and expenses to create more financial stability, with 70% of entrepreneurs using Tala to help keep their businesses running through periods of uncertain income.

The study also found that Tala provides clear and immediate emotional relief with nearly 8/10 respondents indicating increased relief or happiness about their financial situation after taking a

Tala loan, including after repaying their loan. Studies have shown that people under stress tend to make poorer financial decisions, so this is an important testament to our impact.

We are preparing to undertake and measure more impact across our markets this year

What are your plans in the foreseeable future?

Tala has been able to position itself as the largest non-bank fintech in the market and we are always researching ways to meet more of our customers’ financial needs and have some exciting pilots on the horizon. To help our customers grow in all aspects of their financial lives, we are now providing free in-app financial education. We hope to continue innovating and serving clients so that we can grow our market share as we bring our mission to increase financial access and improve financial health to life.

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