Perspective: UChicago Innovator-Tala
A UChicagoLA Alumni Club career panel event with Santa Monica based start-up Tala, one of the top 50 fintech companies in the world, according to Forbes, by Bill Sullivan, AB’90.
Tala is a forward-thinking finance company that offers a new approach to credit scoring and borrowing for underserved countries around the world.
On June 29, the Young Alumni Committee of Board of the University of Chicago Alumni Club of Los Angeles, with grant support by the UChicago Alumni Association, hosted an event with a group of Tala executives featuring a series of preselected questions and open audience Q & A, all of which was moderated with eloquent assurance by Rand researcher, Crystal Huang, AB’10.
Tala’s inspiration and mystique derives from the fact that for the first time, citizens in underdeveloped countries who have never had credit can apply and be underwritten using only the data on their smart phones through the use of an app. To achieve this, multiple frontiers must be crossed. First, data scientists working for Tala are creating new algorithms to evaluate risk criteria with an information pool never before considered for something as vital as a credit score. Second, customer relations is achieved not by imposing Western cultural norms upon developing cultures; but by working within the mores of each individual culture to create more productive client relationships based upon mutual respect and understanding. Then, to be successful, the business model must rely upon smaller, short term loans at highly competitive interest rates.
For this to be profitable, a high volume of loans must be processed. In 2016 alone, Tala disbursed over $50 million in loans to 1 million recipients, with an astonishing 90% payback rate. After early attempts to serve the Indian market were overwrought with challenges, Tala retooled for successful operations in Southeast Asia, anchored in the Philippines; and East Africa, with Nairobi, Kenya as their hub.
Tala has now been ranked among the world’s top emerging finance companies by both Forbes and Money. While Tala’s methods are fascinating, it is their mission to reach out to citizens in developing countries that makes them inspiring. Bringing investment capital to people in places that have never known it could redistribute wealth between the rich and poor, and democratize the economies of the world. Prosperity could be replace poverty. Hope could overcome despair. Pride across entire populations could replace collective, low self-esteem. And with these successes, education could replace ignorance and mysticism.
In the model of other inventions that have brought once unthinkable changes to the human race in centuries past, Tala is the 21st Century’s reminder that no dream is too big, and no vision is too outrageous. The success of Tala’s mission could prove every bit as essential to the development of the human race as the printing press, the discovery of electricity and man’s first trip to the moon. For if we can live in a world where wealth can be shared by all, the stability created by global equality could lead to a world where all people could take responsibility for their own values, and we could have a world beyond our wildest dreams.
To the leaders of Tala – you are brilliant, you are inspiring, and we truly do hope that you succeed in changing the world. And a special thanks to Shirley Sung, AB’05, for her unremitting efforts to make this event the huge success that it deserved to be, and for committing herself to fulfill the original vision for this event offered by Chloe Zhu, AB’12. And thank you to Tilly Oren, AM’08, for your selfless volunteering, and to Andrew Flior, AB’04, for your leadership as our club President.