Melinda Gates, cochair of the Bill & Melinda Gates Foundation
Shivani Siroya, founder and CEO of Tala, which grants small loans to people underserved by banks
Melinda Gates knows that successful tech companies have a way of minting money. A computer scientist, she joined Microsoft, the company that her future husband cofounded, in 1987. She has spent the past two decades directing the riches her family accrued toward helping others through the Bill & Melinda Gates Foundation. More recently, she started her own firm, Pivotal Ventures, which helps women succeed in tech. In January, Gates traveled to Kenya, where she met Shivani Siroya, the founder of a startup that calculates its version of a credit score and grants small loans. Gates and Siroya share a belief that technology, paired with resources and creativity, can help generate wealth everywhere.
Shivani Siroya: I was working in India when I started lending people money in my spare time. Maybe $300 at a time, $500 max. I wanted to help out entrepreneurial people—a tilemaker, for example—who I thought would benefit from a little extra cash to invest in their businesses.
These individuals didn’t have credit scores. So I looked at other things. I lent to one woman, for instance, who I knew saved 30 percent of her income every month for her son’s computer class. I’d observed that she bought her inventory every third Thursday of the month, and that people in her community spent more time in her store than any other place on her block. A friend of mine noted that I was underwriting her by analyzing her daily life. The phrase stuck with me.
I realized all this daily life data is sitting right on our phones. When I pay my electricity bill, I get a text message confirming it. When I buy a bus ticket or my paycheck gets deposited, I get a notification. These messages amount to a record of my daily life.
We built that observation into an Android app. With users’ permission, the app looks at their phone usage patterns, their behavior within our app, and other data. We scan texts for receipts and transactions, for example, and try to understand communication patterns and habits. This information allows us to establish trust and provide unsecured credit to customers we have never met.
We’re now in five countries on three continents, and our repayment rate is 92 percent. We’ve delivered more than 9 million loans of $100 each, on average, that are paid back in roughly a month. Our system is not all that different from a digital credit card or a working line of capital, but for an untapped population.
To ensure that we’re building an ethical system, we’re conducting a university study on fair lending and algorithmic bias. We don’t want to include things in our models that could bias us against customers unfairly. We don’t add gender. We don’t add location. We don’t add the number of languages someone speaks.
Data can hold enormous power. For our customers, it’s unlocking access to global markets. But it’s our responsibility to use it wisely. —As told to Jessi Hempel
This article appears in the October issue. Subscribe now.
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Join us for a four-day celebration of our anniversary in San Francisco, October 12–15. From a robot petting zoo to provocative onstage conversations, you won't want to miss it. More information at www.Wired.com/25.
