Tala, a mobile-based online lending firm has announced that it is shutting down its operations in Tanzania and no explanation has been given as to why this is happening.
Nevertheless, the company shared a statement on social media saying;
“We regret to inform you that Tala is currently not offering loans in Tanzania.”
Despite this, customers with pending loans in Tanzania will still be required to clear their debts.
“We appreciate the opportunity to serve you, and wish our loyal customers continued success in your financial journeys. You can use the following paybill number to pay outstanding balances.”
An official from the company confirmed the announcement posted on social media and added, “Yes, we are no longer offering loans in Tanzania. Unfortunately, due to legal reasons, we cannot divulge any more information other than what was communicated on social media.”
The Citizen, a Tanzanian newspaper reports that the company is expected to issue a statement later on explaining the reason behind the closure.
Formerly Mkopo Rahisi (Inventure) Tala currently operates in East Africa and Southeast Asia with its main top markets being Nairobi, Kenya, Manila in the Philippines, Mexico, and India, providing fast personalized loans to approved borrowers mainly entrepreneurs by allowing users to access finances for personal and business use.
In September 2015, Inventure raised $10M series A round to launch into additional markets in Sub-Saharan Africa and Asia. The Series A round was led by Data Collective with participation from Chris Sacca’s Lowercase Capital; Facebook co-founder and independent investor Chris Hughes; Palantir and Paypal co-founder Nathan Gettings and former Citigroup CEO Vikram Pandit among others.
Today, Tala’s Android app aggregates more than 10,000 different data points on a customer’s device, including financial transactions, savings, network diversity, and geographic patterns, and builds a customized credit score, or financial identity. Once a customer has been scored through the app, he or she can quickly apply for credit and receive an instant decision. The size and terms of the credit product are customized based on a customer’s risk and capacity. Credit is disbursed directly to customers’ mobile money accounts in less than 5 minutes, and customers repay their loans directly from the app.
Considering that no collateral is required the lending app attracts over 27 million people around the globe. Its major competitor is Branch, another US-based firm operating in Africa and Safaricom’s Mshwari.