Tiaxa: Using leapfrog technologies to provide “nano-credits” to millions
Countries: Global; building on its strong operations in Latin America to expand in Sub-Saharan Africa and Southeast Asia
Sector: Telecommunications, access to finance
Challenge: Millions of people in developing countries lack access to basic financial services, which has made these countries excellent candidates for leapfrog technologies such as mobile financial services to increase financial inclusion and to support seamless financial transactions
Solution: Tiaxa has developed proprietary technology to extend tiny credits in amounts as little as 2 cents, to provide cash to prepaid mobile phone users with insufficient account balances through its Airtime Nano-Credit business. More recently, Tiaxa has expanded into a new product line, Mobile Money Nano-Credits for mobile wallets, which provides small cash loans for a range of non-airtime uses, including small cash advances, transfers, remittances, bill payments, and access to other financial services.
The 15-year-old company utilizes several algorithms that enable it to make credit decisions in real time and quickly adjust its lending practices based on changing conditions. Today, Tiaxa has more than 130 million end-users in 20 countries in its scoring database and it provide seven million Nano-Credits a day. It charges a small fee for each credit extended.
Tiaxa’s scale, its ability to use technology to make credit decisions quickly, its nano loan sizing and its fully digital loan advance and recovery processes enable it to make a profit serving serving clients that many traditional financial institutions that typically cannot provide such small loans profitably.
OPIC has committed a $5 million loan to Tiaxa that will support its geographic expansion in new markets and further penetration in existing markets.
Tiaxa is the second project to receive financing through OPIC’s Portfolio for Impact (PI) Program, designed to provide financing to smaller impact investing projects that offer significant potential for social impact but may face challenges obtaining financing because they are in an early stage.
Impact: The project is expected to have a far-reaching developmental impact by providing mobile financial services to millions of people in developing countries. Tiaxa expects the OPIC loan will enable it to reach more than 500 million scored end-users over the life of the OPIC loan. The Nano-Credits extended to Tiaxa’s user base will have a broad impact on its business, supporting an expanded platform for mobile financial services to underserved individuals, resulting in increased financial inclusion.
This project was profiled in 2015