Identity means everything to humankind. We are who we are because we hold onto an image of ourselves. This is power. It is control. Consequently, a people without identity, are a people void of control. Nothing gives people control over their lives more than financial identity. It’s with this knowledge that the Android app called TALA (formerly InVenture) came into play, riding on that concept.
TALA is a FinTech (Financial Technology) company and app that allows customers in East Africa to access loans and other forms of credit directly through their mobile phones. The app collects data from around 10,000 data points and assesses borrowing potential to create a financial profile of the user.
Erik Mutei, a Cleanleap blogger, interviewed Amanda Donahue, the Vice President East Africa, in TALA’s Nairobi office. TALA is a member of the Siemens Stiftung’s “empowering people. Network”. TALA is showcased in the Network’s Solutions Database along with other ICT projects, with the app empowering users to take control of their financial security through a comprehensive credit score where they normally were unable to access loans due to the lack of a credit background.
Origins-True Labor of Love
Shivani Siroya is the founder and CEO of TALA. The company is based in the USA but Shivani is originally from India. From the onset, she had a drive to reach out to the untouched potential in the developing world. Her goals and intentions were to understand where people were spending their money, how they were using the finances they had and the history with their management of money.
Shivani spent close to three years in Africa working for the UN in the finance sector. During that time she spent time traveling all over the continent doing interviews and getting involved in local people’s lives. She enjoyed sitting at the back of a store of a micro-entrepreneur and watching the everyday transactions that took place.
Through these experiences Shivani came up with the idea for TALA. It was born from the realization of a huge gap in the market: people were doing many transactions for everyday purchases but they were not gaining any ability to save or borrow for bigger purchases. They lacked a credit history that would help them have financial accessibility and growth.
They could not access loans that would help them jumpstart their businesses. Shivani had a grasp of the gap that existed and how it could be filled. Shivani, described the creation of TALA as a true labor of love. Six years ago, TALA began a mission to create financial identities for people and free them from traditional chains of credit creation.
Initially, Shivani started lending money in India, although it was on a different platform from TALA. She then shifted the focus to Kenya where money mobile technology- M-pesa, was already in play. The choice was also fuelled by the fact that people in East Africa already had an understanding of how to transact via mobile phones. Penetration of smart phone literacy around transactions was at a comfortable level. However, the challenge was to find ways of capturing mobile phone data, and how to utilize that data to generate an accurate credit score.
The Technology-Credit Identity
Unlike other mobile technologies like Mshwari, TALA establishes financial identities from up to 10,000 different data points from a smart phone and converts it into a credit score. This goes beyond traditional models, in that the credit score takes into account the network diversity, social connectedness and geographical patterns. This contributes to the data points that build an identity of the customer’s borrowing capacity.
Challenges – Building trust
There is a lot that goes into the verification process for customers. TALA access a wide range of personal data from an individuals’ phone, such as their social networks and spending patterns. The team at TALA is very conscious of protecting people’s identities and their data. TALA is ultimately responsible for the information they take from the customers’ phones and use this to access the right data they need to formulate the credit history.
There is also the need to provide some financial education to small business owners or new families that are just starting out, on how to take loans from TALA and make it work out of them.
Of Fresh Starts-Financial Identities
A key concept behind TALA was to be a financial partner, not a bank. It is designed to provide a solution and a bridge to fill in the gap by moving people across social classes in order for them to grow, expand, and provide for their families. This decision was part of a rebranding plan: TALA had to remain a financial platform to provide a choice and availability to people who previously did not have these privileges. To become a part of their daily lives in providing services that would continue helping them.