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Consumer Lending: a Kenyan App Lands in India

The mobile-first financial services company Tala announces a 65 million dollars equity investment to expand to the Indian market via proposing their Android app for consumer lending. This strategic move comes at the right time in a country where the government focuses on improving banking inclusion based on digital technologies.

Tala unveiled their first instant credit app in Kenya in 2014 and grew significantly throughout 2017 as they entered Tanzania, the Philippines and Mexico. Their mobile platform was used for more than 6 million credit lines to roughly 1.3 million customers and originated over 300 million dollars in credit.

Instead of conventional banking/credit-related data, they rely on alternative scoring methods including the way customers use their Android device, and on Artificial Intelligence. This information includes phone calls, text messages, purchasing history, use of mobile apps and even personal data.

Tala scrutinises sensitive information to enabling more than 85% of their customers –with little or no credit history– to subscribe a consumer credit almost instantly (in ten minutes). The amounts they lend range from 10 to 500 dollars.

Comments – India: data as a means to open the consumer credit market

This funding round allows Tala to reach out for India, an emerging market –just like South America– still insufficiently deserved by traditional financial institutions. These micro-lending service will make it possible to address more customers and support entrepreneurial endeavours likely to positively impact the local economy.

Tala wants to build a banking model fully based on data analytics. The algorithms they implement are designed to monitor segments-specific behaviours, especially underbanked customers, and provide them with a means to be granted a credit line.

Besides, the risk Tala takes is actually quite low considering the amounts they lend and the data they analyse. They may aim for than 3 billion underserved customers worldwide through a mobile approach likely to provide most people with ways to manage their financial life. Eventually, they hope to stand out as one of the most prominent mobile lenders.