PayPal Inc Holdings Inc has made a strategic investment in Tala, a financial technology startup that lends to underserved consumers in emerging markets, with operations in Kenya, Tanzania, Philippines and Mexico.
The companies declined to disclose the amount of the investment, but Tala said it will use the funding to further develop its product and broaden its reach.
“At PayPal, we believe that everyone should have access to transparent, convenient and secure financial services,” said Mark Britto, Senior Vice President and General Manager of Global Credit, PayPal.
“Tala shares our vision of reimagining financial services, especially for the unbanked and those underserved by the traditional financial system. Tala empowers these people through innovative mobile solutions to improve their overall financial health and we are proud to help them achieve this goal.”
To service these consumers, Tala analyses device and behavioural data to underwrite them and disburse loans of between $10 and $500 on mobile wallets or other methods. More than 85 per cent of customers receive a loan in less than 10 minutes.
PayPal and Tala said they shared a commitment to serving this consumer segment.
“We see we are all very mission-aligned, both Tala and PayPal,” Tala CEO and founder Shivani Siroya, said in an interview. “It’s been clear through the due diligence process that we share the commitment to building the financial health of the underserved.”
Since splitting from e-commerce platform eBay in 2015, PayPal has been seeking to transform itself into more than a payments processor. It has been expanding through a string of partnerships and acquisitions.
Its suite of products included remittances business Xoom, which it acquired in 2015.
“Tala shares our vision of reimagining financial services, especially for the unbanked and those underserved by the traditional financial system,” Mark Britto, senior vice president and general manager of global credit, at PayPal said in a statement.
Based in Santa Monica, California, Tala lends to individuals in Kenya, Tanzania, the Philippines, and Mexico through its smartphone app. The company has lent more than $500 million to customers and has more than 300 employees around the world.
