NAIROBI, Kenya, Jan 24 – Did you know that how you save contacts on your phone could build or damage your credit score?
According to Shivani Siroya, the Founder and Chief Executive of Tala – a mobile Technology and Data Services Company, how you organize your phone book tells volumes about you.
“We have found that customers who have listed more than 40 percent of their contacts with their first and last names are more likely to be good borrowers. So if I am organized I might save the first and the last name of my contacts,” said Siroya, linking hints of personal organization to creditworthiness.
She adds that the type of mobile device can also help micro-lending mobile-based companies assess credit-worth customers.
“If I am working on a crappy phone. I will only put the first name. But you always have to start with believing in people. If you believe that people are trustworthy, now it’s a matter of using data and technology to prove that potential,” Siroya told Capital FM Business.
Tala was launched in 2014 and has so far disbursed more than 4.6 million loans worth more than Sh25 billion in loans in Kenya, Tanzania and Philippines with a repayment rate of 92 percent.
“We are a mission-driven technology company; we are always willing to constantly learn, understanding customers and doing user research constantly for us to grow,” she said.
Siroya started the firm with her own savings after she discovered a huge problem accessing credit especially for people with no credit score or access to financial inclusion.
“I discovered a problem that I was obsessed with solving. I was working for the United Nations Population Fund, worked across nine different countries in Sub Saharan Africa. I ended up interviewing over 3500 people, over 3 and a half years. I got to understand the capital inflows and outflows through the system. I realized people were really lacking in financial access and that’s how the company was born,” Siroya told Capital Business.
Tala disburses between Sh1,000 and Sh20,000 in loans to 900,000 customers monthly with 70 percent using the loans for working capital.
Average borrowing is between Sh7, 000 and Sh15, 000 which is mostly borrowed at 4 AM.
“Interesting thing we have seen is how people borrow early in the morning, go the market, by the produce they need, sell it through the day and return the money in the evening despite our products having a (maturity of) 21 days as well as 30 days,” Rose Muturi Regional Manager East Africa Tala adds.
In addition to Kenya, Tala also lends in Tanzania and The Philippines, with an office in the United States.
“We are exploring Uganda and Rwanda building on our success in Kenya and Tanzania,” Siroya said.
Tala is part of over 20 mobile lending firms in the country with others including Branch, Okolea, Saidia, KCB Mpesa, Mshwari, Haraka, Kiva, Kopa Chapa, Pesa Pata and Pesa Na Pesa among others.
According to the World Bank, 75 percent of Kenyans are now part of the financial system thanks largely to mobile money.
The Global Findex Database 2014 said 75 percent, or eight out of every 10 Kenyan adults, is banked — through bank and mobile money accounts — beating South Africa, which has 70 percent of its population banked, Nigeria, with 44 percent, and Ghana with 40 percent.
Kenya’s banked population is above the global average of 62 percent. Uganda is ranked second in East Africa, with 44 percent of its citizens having access to banking services, followed by Rwanda at 42 percent, Tanzania at 40 percent and Burundi at seven percent.