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On Monday, Tala – a fintech startup lending the unbanked consumers in emerging markets – announced it has received funding from PayPal Inc. Holdings.

Though Tala remains tight-lipped on the amount received, experts believe the investment was a strategic move for PayPal. The fintech startup says the funds will go towards broadening its reach and developing its product.

Tala currently lends to individuals across Kenya, Tanzania, Mexico, and the Philippines through a smartphone app. The company reports having lent out over $500 million to customers across these markets and employs about 300 people.

Tala is one of the many growing cohort of fintech businesses capitalizing on the widespread adoption of smartphone and internet across emerging markets. Also were traditional banking infrastructure have not yet reached the everyone, with a big segment of the society remaining unbanked.

Traditional banks, through fear of the risky individuals, have shied away from such markets, especially if they don’t have a payslip and/or collateral to secure their loans. It is interesting to note that more than 75% of adults across the globe do not have a record with a formal credit bureau. That is a big challenge to traditional banks when it comes to lending money.

However, fintech startups have seen an opportunity for business in such markets, as they use big data, ML, and AI to mitigate the risks involved. For instance, Tala analyses loan applicant’s devices and their behavior as capture by big data, and from there, it takes to underwrite them and disburse loans in the ranges of $10 and $500 to their mobile money wallets. Loan applicants on Tala get their loan approval within 10 minutes of applications.

We see we are all very mission-aligned, both Tala and PayPal. It’s been clear through the due diligence process that we share the commitment to building the financial health of the underserved,” said Shivani Siroya, the CEO of Tala.

His counterpart, Mark Britto, the Senior VP and GM of Global Credit at PayPal adds, “Tala shares our vision of reimagining financial service, especially for the unbanked and those underserved by the traditional financial system.”

PayPal deep dive into e-Business since parting ways with eBay in 2015

PayPal might have been born out of the need to secure payment for e-commerce platform eBay. However, they split from eBay back in 2015, and ever since, it has been looking for ways it can evolve beyond just being a payment processing platform. It has been aligning itself with other digital businesses through partnerships and acquisitions.

In 2015, it acquired Xoom, a remittances service provider.

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