Saturday, June 15, 2024

Strengthening Financial Health Key To Unlocking Economic Potential Of Global Majority


Strengthening Financial Health Key To Unlocking Economic Potential Of Global Majority


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Great strides have been made in terms of increasing financial inclusion globally in the last decade according to The World Bank. However, four billion people or 52 percent of the world’s population primarily located in emerging markets still don’t have access to savings, credit, bill payment tools, and/or the ability to transfer money. They are part of the Global Majority who, while having trillions of dollars in economic power, have historically been excluded from accessing financial services.

Digital lending platform, Tala, is committed to enabling better financial inclusion among the Global Majority. This was further detailed in its latest Impact Report where it presented Tala’s innovative solutions and technologies for its customer base worldwide, its progress towards sustainable growth, and milestones for the 2023 calendar year globally.

One of the key highlights of the report is the impact of Tala on the financial health of its customers. Financial health is measured by Tala in four parts: (1) Use, or the ability to manage daily finances, including transactions; (2) Protect, or the ability to prepare for and cope with financial emergencies and shocks; (3) Grow, or the ability to plan, save, and invest for the future; and (4) Happiness, or a positive sentiment towards one’s financial life.

In the Financial Health Survey it conducted in 2023, Tala found that all respondents regardless of demographic or history with the company had a Tala Financial Health Score of 3.8 in a Likert scale of 5, indicating a moderately healthy customer base.

“This holistic approach in measuring our customers’ financial health allows us to gain valuable insights that we can use to expand our existing products and services and develop new ones that can help them unlock their economic potential,” said Moritz Gastl, General Manager of Tala Philippines. “At the same time, knowing that our customers are largely financially healthy means that Tala is doing its part as their reliable and trusted financial partner, enabling them to take charge of their financial lives and achieve their goals.”

The Impact Report also shows that longer-tenured customers of Tala reported being more financially healthy and more confident about the future than newer customers, which implies that customers’ financial health likely improves throughout their relationship with Tala.

May Mondejar, a long-time Tala customer, shared how she was able to grow her business with the help of Tala’s financial services.

“As time went on, my credit limit increased more and more. Back then, I only borrowed money for utilities, but now, I use it to sell food for my business, from buying ingredients to outsourcing delivery services. Tala helped me a lot, that’s why I consider it my ‘buddy.’ I really felt the trust that Tala had initially given me, and we still continue to trust each other to this day,” she said.

The report further states that Tala has been particularly impactful for women and their financial health, especially in terms of building financial confidence and decision-making. According to a third-party survey, 80 percent of women borrowers reported increased self-confidence because of Tala’s loans, and 58 percent reported an increase in their influence on decision-making; of those, 67% talked about having more financial independence.

From its proprietary credit scoring model to its financial education initiatives and respect-based repayment practices, Tala equips its customers with the opportunity, tools, and guidance to support their journey towards better financial health, with the aim to cultivate radical trust and to improve financial inclusion for the Global Majority.