Growing up in Tianjin, China at the peak economic boom, I was able to witness disadvantaged communities strengthen through a banking system that was finally recognizing them after decades of rejection. Economic growth in China was consistently beating forecasts and the benefits were seen throughout local communities. Small family-owned businesses were continously opening up in our neighborhood, and the enthusiasm of newfound social mobility was becoming more apparent.
Now that my family has finished projects in Asia and have moved on take new steps in the emerging economies of Africa, I am thrilled that startups like Tala are driving empowering change there, similar to what I experienced in China.
Founded in 2012, Tala is a Santa Monica, CA based fintech startup, aimed at serving underbanked communities in emerging economies. Leveraging the ubiquity of smartphones, Tala uses a mobile app to gather personal data, allowing local entrepreneurs to receive financing without traditional credit information. In the matter of minutes, a local business owner can fill out an application through the app, and get approved for micro-financing. This would otherwise have been impossible through traditional instutitions.
The data tracked includes geo-location, phone calls, contacts and a collection of helpful information that gives a personal overview of consumers. Traditional institutions would not be able collect such an extensive profile, which has given Tala a repayment rate of over 90%.
Startups like Tala are clearly in it for the long time. Their thousands of in-person interviews are a testimony of their commitment to revolutionizing credit lines. With over 2 billion people worldwide without access to banking services and lower costs of smartphones, the future of technology leveraged micro-financing is looking brighter than ever.