In Kenya’s rapidly evolving financial landscape, Tala has become a key player in providing quick and accessible credit through its mobile loan app. Launched in 2014, Tala leverages data science to assess creditworthiness, offering a vital financial lifeline to many Kenyans who may not have access to traditional banking services. Here’s an in-depth look at the Tala loan app, its features, user experiences, and key considerations for potential borrowers.
How Tala Works
Tala provides loans ranging from small amounts up to Ksh 50,000. The application process is straightforward and entirely mobile-based:
Download and Registration: Users start by downloading the Tala app and registering with their personal information.
Application: Applicants must provide details about their financial status, employment, and intended use of the loan.
Approval and Disbursement: Tala uses this information and additional data to determine creditworthiness. Approved loans are disbursed via M-Pesa within minutes.
User Experiences
Positive Feedback:
Convenience and Speed: Users like John M. and Mary A. praise the app for its quick disbursement and user-friendly interface. They find the process straightforward and appreciate Tala’s support for personal and business financial needs.
Transparency: Many users appreciate Tala’s clear terms and conditions, which help them fully understand their obligations.
Mixed Reviews:
High Interest Rates: While users such as Grace K. find the app convenient, they often mention the high interest rates as a significant drawback. This sentiment is echoed by other users who find the cost of borrowing with Tala to be quite high
Customer Support: Some users, including Peter W., have noted that while customer support can be slow to respond, issues are generally resolved satisfactorily once addressed
Critical Reviews:
Cost and Penalties: Critics like James L. point out the high cost of loans and steep penalties for late payments. These users recommend using Tala primarily for emergencies rather than regular borrowing due to the financial burden of the high interest rates and penalties.
Application and Repayment Process
Applying for a Tala loan involves entering detailed personal and financial information into the app. Once approved, a loan is quickly disbursed to the user’s M-Pesa account. Repayments are made through the M-Pesa pay bill option, and users receive confirmation via SMS
Interest Rates: Tala’s loans come with high interest rates, which can be a significant consideration for borrowers.
Late Payment Penalties: If a borrower fails to repay on time, Tala imposes an 8% fee on the remaining balance and provides an additional 14-day grace period. Beyond this, borrowers may be blacklisted by the Credit Reference Bureau (CRB), impacting their ability to secure loans from other lenders.
Conclusion
Tala has become a crucial financial tool for many Kenyans, offering quick and accessible loans through a user-friendly mobile app. While potential borrowers highly appreciate Tala’s convenience and speed, they should carefully consider the high interest rates and penalties associated with these loans. For those in urgent need of financial assistance, Tala provides a valuable service, but it is best used with caution and a clear understanding of the costs involved.
