Discrediting Traditional Lending Models
In the realm of capital, Shivani Siroya’s micro-finance venture Tala is funding developing-world business owners who would usually be considered too risky by the traditional standards of credit bureaus or who would not be tracked at all. Tala landed on Forbes’ Fintech 50 2018 list of disrupters, with $109 million raised and 4.5 million loans initiated, with a repayment rate of 90%.
Tala’s approach to financing approval focuses on smartphone data, crunching information such as GPS-recorded daily movements, as opposed to traditional factors like mortgage and credit card payments. Siroya’s firm gathers tens of thousands of data points, emphasizing the necessity of company transparency, customers’ ability to choose what data is accessible and tasking teams to conceal some details that might lead to bias. “We’ve chosen not to put in gender, race, location, the number of vowels in someone’s name—that can relate to the tribe that they’re from, being from a rural area or an urban area,” she explained. “When you want to stand for something, you actually have to be willing to give other things up.”