TALA PHILIPPINES is eyeing to grow its customer base to 10 million within the next three years as it also seeks to widen its reach to other Southeast Asian markets.
“Where we are at the moment globally, we would like to be in the Philippines in three years from now, so at around 10 million customers,” Tala Philippines General Manager Mortiz Gastl said at a briefing on Wednesday.
The financial technology company currently has over three million customers in the Philippines and over 10 million worldwide.
“We still believe that it’s about improving and increasing reach — so, reaching more customers in the Philippines with our existing product, because we do feel that it provides a lot of value and that means really going deeper into certain market segments,” he added.
Tala has disbursed over P100 billion worth of loans in the Philippines, with 500,000 loans granted globally on a monthly basis.
Apart from the Philippines, Tala is also looking to expand its presence in other markets in the region.
“We are actually expanding to other markets in Southeast Asia in the next year or so,” Tala Philippines Senior Marketing Manager Missy de Rivera-Santos said.
“We have proven in several markets now that our model works, that its a very successful product, our customers like the product and therefore we are slowly looking at expanding this to other countries,” Mr. Gastl added.
He said they are closely looking at Vietnam as their next potential destination.
“But we have no rush. We still feel like there is a large opportunity in the Philippines. You think there’s so many players, but in reality, there are still massive gaps in the market,” Mr. Gastl added.
Tala is also working on expanding its product line in the next few years to cater to segments such as micro, small and medium enterprises (MSMEs), he said.
“We look at specific segments and potentially structure new products around these segments. These MSMEs, they’re currently using the Tala loan to buy inventory. Luckily, our product is flexible enough to allow for that, but an inventory loan is a different loan product from the product that we have at the moment.”
Roughly 38% of Tala’s borrowers are informal MSMEs, he said, but noted that it is difficult to estimate the exact number given how broad the sector is.
“Over time, we really hope, in the next one or two years, we hope to actually have a dedicated product for larger product segments,” Mr. Gastl added.
Tala currently offers a flexible credit line capped at P25,000, but they are looking at raising this limit in the future.
“We will certainly increase that further, but we are focusing a lot on giving customers access in the first place,” Mr. Gastl said.
“We are aware that sometimes P1,000 may not be enough, but at least it’s a way in the door.”
Over time, Tala is planning to upgrade its credit limit to ideally P50,000, he said.
“At some point, maybe even P100,000 at cheaper rates than what we’re offering at the moment, but this is really something more like a three-year plan because over time we need to learn more about the customer and give them better loans,” he added.
Tala will also continue to focus on credit alone, Mr. Gastl said.
“We’re not positioning ourselves to be like the next super app that has a lot of other features. The focus is really on there’s a massive need for credit. Customers are underserved. We want to make sure that we give a good credit product at a good price to the right customers,” he added.
Tala is also working on offering QR payments, which will soon be available to clients.
“We still have a lot of work to do in terms of our industry in general. People don’t always have a positive relationship to credit in the Philippines, and that’s really something that we’re trying to overturn,” Mr. Gastl said.
FINANCIAL LITERACY
To improve credit perception, Tala offers various initiatives on financial literacy to educate Filipinos on credit use and financial management.
It is also currently working with the Atlantic Council Geoeconomics Center for a research partnership on the “global majority.” The global majority mainly refers to women, children, MSMEs and individuals that make up the largest percent of the population, but are more likely to be unbanked and underserved, according to Tala.
“It doesn’t just end with a bunch of data and numbers, but really it sets the groundwork as a reference to influence policy,” Ms. de Rivera-Santos said.
This would also ensure that “investors and stakeholders can actually use this information to create a more inclusive, financially inclusive industry here in the Philippines,” she added.
Tala Philippines External Affairs Director Arianne Ferrer noted the gaps in knowledge on the state of finance in the Philippines.
“That’s what we’re working with this entity to study more about. What are the metrics? How do we make sure these standards of measurement are consistent throughout countries and throughout regions? Because there’s so much data that’s not adequately captured by existing mechanisms.”
The research could help the industry develop frameworks that can be used in the future, she added.
“It’s really the beginning of a conversation, and we’ll try to get various stakeholders in the public sector and the private sector. It’s really getting everybody on the same page and collaborating research, active engagement with the community,” Ms. Ferrer said. — Luisa Maria Jacinta C. Jocson
Tala looks to expand customer base to 10M in next three years
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