Mobile loan app Tala has just secured a sh6.5 billion investment in its third round of funding, the funds will be used to grow its Kenyan operations and to expand to new markets of Mexico and India- both emerging markets with a large appetite for increased financial inclusion.
“We are excited to bring our globally proven customer-driven platform to additional markets where there is high demand for consumer credit and a significant underserved population, said Tala’s Founder and CEO Shivani Siroya.
The mobile loan app uses details collected from a users’ phone; SMS, call logs, Wi-Fi data, location, phone/app history etc. to calculate a credit score and determine whether a person would receive a loan or not. Traditionally, credit scores would only be available to people with bank accounts and a formal source of income, essentially locking out a large section of the population from credit access.
This new alternative data-based system of credit scoring has been able to correctly predict the creditworthiness of low-income earners with repayment rates of up to 90 percent according to CEO Shivani Siroya in a past Forbes interview. Currently, Tala is in Kenya, Tanzania and the Philippines, where it has disbursed in excess $ 300 million in credit to more than 1.3 million people.
Tala disburses loans of up to sh50, 000 depending on how consistently and promptly users pay their loans with extra charges for defaults or delays in payment.
The sh6.5 billion round of funding has been led investment company Revolution growth in addition to other investors including, IVP, Data Collective, Lowercase Capital, Ribbit Capital and Female Founders. This latest investment brings Tala’s total investment to a total of sh10.5 billion.
“We are excited about how Tala is using mobile devices and data-science to unlock this huge unmet opportunity and serve a market that is underserved by traditional financial institutions,” said Steve Murray, Managing Partner at Revolution Growth, who is also set to join Tala’s board of director.