Dar es Salaam. Digital lender Tala moved yesterday to dispel fear in Kenya about business continuity following its sudden exit from Tanzania.
Tala issued a statement in Nairobi seeking to secure its three million customers as news of the exit from Tanzania spread.
The US-based mobile money platform also appeared to backtrack on the Tanzania position, saying it had not made the final call to totally quit the market.
“Tala Tanzania has not made a decision to permanently close operations. However, after piloting our credit product in Tanzania, we have paused our lending operations and are undertaking a review of our operations to determine our path forward in the market,” said the company.
The statement came on the day The Citizen reported its exit from Tanzania. The report was based on a post by Tala Tanzania on its social media accounts on September 6, 2019, announcing the exit.
“We regret to inform you that Tala is not currently offering loans in Tanzania. We appreciate the opportunity to serve you, and we wish our loyal customers continued success in your financial journeys,” it said.
It however noted that lines were open for repayment of outstanding loans. Following the fresh statement issued in Nairobi yesterday, its Tanzania exit strategy remained unclear but also appeared to act to forestall a ripple effect in Kenya.
“Our operations in Kenya continue uninterrupted as Kenya is a critical part of our global business. We are continuing to evolve our product to meet the needs of our 3 million customers here and are also piloting some exciting new offerings in financial education and coaching,” it said.
Tala says it has issued $1 billion (Sh2.3 trillion) and impacted over 4 million individuals. Other than Kenya and Tanzania, it has operations in the Philippines, Mexico and India. It was not clear how much of this money was loaned in Tanzania and what the outstanding debts are.
Tala provides fast, personalised loans to approved borrowers targeting primarily self-employed individuals. It requires no collateral.
Tala which is headquartered in Santa Monica is backed by leading venture and impact investors including PayPal, Revolution Growth, IVP, and Lowercase Capital.
Analysts say Tala’s reported exit from Tanzania may be due to stiff competition from rival offering similar loans and recent legal challenges. Tala’s exit has come just months after the company was accused of economic crimes and allegedly causing the Tanzanian government the loss of $2.5 million in fraudulent use of their networks under the Economic and Organised Crime Control Act, 2002.