Digital lender Tala surpasses Sh300bn mobile loans as Kenyans borrow more

When Radio Maisha fans searched for a hidden coupon at Lions Garden in Nakuru City during the Radio Maisha Saka Chapaa Campaign on June 24,2023 in a partnership with mobile loan application firm Tala. [Kipsang Joseph, Standard]

Kenyans have borrowed over Sh300 billion from mobile lender Tala in the past decade, underlying the role of digital lending platforms in the country.

Tala, which was founded ten years ago in Kenya is one of the pioneering digital lenders in Kenya and has since expanded into East Africa, Latin America, and Southern Asia.

The company said yesterday it reached 10 million customers highlighting the popularity of lending platforms. In Kenya Tala said it now has 3.5 million customers.

The company said it will be following consumer demand now expanding its financial services to Kenyans locked out of the financial traditional credit systems.

"Reaching ten million customers is a testament to Tala's unwavering mission and our founding principle of radical trust. I am immensely grateful to our ten million customers for their trust in us, as well as to our dedicated team for their relentless efforts to enhance financial access and agency," said Shivani Siroya, founder and CEO of Tala.

"We aspire to serve tens of millions more, working together to reimagine the financial system and demonstrate that a more equitable future is achievable for all."

Tala has disbursed nearly Sh775.5 billion (approximately $6 billion) in credit worldwide.

Currently, Kenya features more than 120 digital lending platforms. This surge is largely due to many Kenyans facing challenges in obtaining bank loans for personal or business use, primarily because of insufficient collateral and credit histories.

Following recent executive appointments, product launches, and business updates, Tala says it plans to enhance its presence in Kenya and existing markets with new products and leverage the potential of AI, while also exploring new markets to further empower the global majority in the coming year.

The move signals a fresh round of war between mobile lenders and traditional lenders like banks.

A recent Geopoll survey indicates that mobile banking and lending services have significantly improved access to financial resources for unbanked populations, boosting financial inclusion in Kenya by more than 50 per cent.

According to Financial Sector Deepening Kenya, the annual digital lending market volume is estimated to range between 15.4 million and 29.6 million loans per year. It further notes that, by value, the market size is likely between Sh39 billion and Sh195 billion.