arrowCreated with Sketch.arrowCreated with Sketch.Page 1Created with Sketch.arrowCreated with Sketch.arrowCreated with Sketch.close-icondia-arrowFill 1Created with Sketch.follogo_exsitereadPage 1Created with Sketch.Fill 1Created with Sketch.
Social Good

Shivani Siroya

CEO & Founder, Tala

Consider Shivani Siroya the financial voice of the people. Her Los Angeles-based microfinance startup, Tala, offers small loans of around $40 to customers in emerging markets. Funds arrive in around 60 seconds.

“In places like Africa and Southeast Asia, most people don’t have credit scores,” Siroya explains. “They don’t even have national IDs or voter cards… For those more than 2.5B people without financial identities, it’s impossible to get loans or even open a bank account.”

The idea of microfinance isn’t new. Google small business loans in Kenya, and you’ll find dozens of companies offering loans to customers looking to spur their business, circumvent an emergency or even pay a child’s school tuition. (You’ll also find more than a few friendly loan sharks.)

Tala, however, does one thing radically differently: They use the 10,000 data points on a person’s smartphone—mobile merchant transactions, social media, web searches, etc.—to replace credit scores. Their app pulls in and analyzes an individual’s identity, changing the way humans are valued.

Tala has given 650k loans to people without credit scores

“After college, I spent years working on emerging markets and microfinance at investments banks, the UN and UNICEF… and the problem, at least to me, was totally clear: Banks in emerging markets don’t offer loans to customers without credit scores, which almost no one has. So, when people need money to buy the inventory to open a second food stall, for example, they have no options—at least not within the formal market.”

How did you come up with the idea?

“The situation is incredibly difficult… You can’t imagine. And while I originally wanted to build this product as part of an existing institution—I’d never planned on being an entrepreneur—that proved impossible. When I brought the issue to my bosses [at the UN], they told me… to keep doing interviews and research. But at that point, I was pretty sure we had enough information. It was time to do something. In my mind, the answer was a startup that could be nimble and operate without all the red tape of a large nonprofit, bank or any large organization.”

Which leads to dangers like loan sharks.


“In emerging markets, there are more than one billion smartphones… Desktops and landlines are too expensive, but smartphones are accessible. They also have the Internet; they have phone capabilities. In essence, they’re a computer in your hands. And, interestingly, most activity in these parts of the world is Android-based, which is why we chose to build our app on that platform specifically.”

Why build Tala as an app as opposed to a website?

“You can pretty much get to know a person through the data that exists on their smartphone… everything from utility bill payments to a person’s income to the people they interact with on a daily basis. We ask potential customers about eight to ten questions and then pair their answers with existing data as a means of instantly scoring and providing a customized loan. What we’re really trying to do is understand a person’s income and how likely they are to pay a loan back… Most traditional institutions ignore these customers because they ‘aren’t backed by data.’ Tala simply finds the data in other places.”

And our cellphones carry a significant amount of data.


“We have a very flexible process, as we aren’t trying to monetize off the first loan. Our goal is to develop a longterm relationship with customers where they come back 5, 10, 20 times—anytime their business needs a little extra cash. It’s also in our best interest for them to repay, so, we do give them more time than other loan providers.

Tala also motivates customers by providing both negative and positive reporting. If someone consistently repays their loans on time, we’ll report that to an established entity and help the customer build the formal financial identity they were missing in the first place. So, not only are we circumventing their lack of credit score, but we’re also helping them build one.”

What happens when someone can't pay?

Around 70M Americans are unbanked or underserved, but the United States has an incredibly competitive, saturated market… It’s not the ideal place for a startup like Tala. That’s true for two reasons: One, the cost of acquiring customers here is much higher. Most banks estimate it costs $400 to acquire new customers and can’t imagine an environment like Kenya in which users can be found for $30. The other aspect is that our government has put in a lot of regulation protecting consumers, making it very difficult for financial institutions to be nimble. When you put in caps around interest rates, for example, it’s becomes difficult to innovate… and that’s what you see in developed economies, right? Consumer protection is necessary in many cases, but it severely limits disruption.”

Do you think there's a need for Tala in the US?


In the 11 months since launch, Tala has offered more than 650k loans amounting to roughly $22M dollars. But why—aside from the businesses started, the kids sent to school, the medical bills paid—is this so important?

“For many customers, this is the first time they’ve seen an institution actually fulfill its promise,” Siroya concludes. “When we say instant, we mean instant; when we say flexible, we mean flexible.”

What that really boils down to is trust—trust in a part of the world used to expecting physical violence for being late on a payment. And to us, that’s a Disruption worth fighting for.

In conclusion.


Facebook Twitter

You May Also Like

Rachael Chong - CEO and Founder of Catchafire
Social Good

Rachael Chong

CEO & Founder, Catchafire
Carmen Carrera - Transgender Supermodel and Activist
Social Good

Carmen Carrera

Transgender Supermodel & Activist
Bindle and Keep Disruption Rae Tutera Daniel Friedman
Social Good

Bindle & Keep

Bespoke Clothing for LGBTQ communities
Share: Facebook Twitter