Tala, a digital lending platform that operates in Kenya, India, the Philippines, and Mexico, has reached over 8 million users. The company announced the milestone on Wednesday, saying that it had signed up more than 800,000 new customers in the first six months of this year.
Tala was founded in 2011 by Shivani Siroya, who saw a need for a more accessible and affordable way for people in developing countries to get loans. The company uses artificial intelligence to assess borrowers’ creditworthiness, and it offers loans of up to $500.
Tala’s growth comes at a time when the digital lending market is booming in Kenya. The country is home to a number of other digital lenders, including Branch, M-Shwari, and KCB M-Pesa.
The growth of the digital lending market has been driven by the increasing availability of smartphones and the growing demand for financial services among people in developing countries. Digital lenders offer a number of advantages over traditional banks, including the ability to apply for loans online and the convenience of receiving funds directly into a mobile wallet.
However, the growth of the digital lending market has also raised concerns about the potential for borrowers to be exploited by high-interest rates and predatory lending practices. In Kenya, the average interest rate charged by digital lenders is 15%, which is significantly higher than the average interest rate charged by banks.
The government of Kenya has taken some steps to regulate the digital lending industry. In 2021, the Central Bank of Kenya (CBK) passed new regulations that require digital lenders to obtain a license from the central bank. The CBK has also launched a public awareness campaign to educate Kenyans about the risks of digital lending.
However, more needs to be done to protect Kenyans from predatory lending practices. The government should continue to regulate the digital lending industry and should crack down on loan sharks. Kenyans should also be careful when using digital lending apps and should make sure that they understand the terms of their loans before they sign up.
