Mobile money lending firm Mkopo Rahisi has rebranded as a financial services provider and changed its name to Tala. It will now aid its users build a credit profile and make mobile loan application easier.
“We are looking at positive reporting to Credit Reference Bureaus when you take our loans we pass the information to increase your access to formal loans with banks,” Tala vice president East Africa Amanda Donahue said.
Ms Donahue added the company wanted to distinguish itself beyond being a loan company to create a credit identity for its customers by utilising their database.
Tala will gather more than 1,000 data points from customers’ mobile phones to make its credit decisions and send loans directly to their phones in record 20 seconds.
There has been a rise in mobile and computer based instant loan businesses using Android applications on smartphones. They include Zawadi Kenya, Saida, Branch, Get Cash, Cash Now, and Pesa Direct.
Kenyans are still borrowing money from loan sharks for up to three times the Central Bank Rate of 11.5 per cent with the figure going up six times in case of a default, despite expansion of the financial space.
Some lenders however fail to indicate interest rates only giving a figure payable monthly or weekly that adds up to a lot of cash if annualised.
Ms Donahue said Tala charges a fixed rate of between 5 to 15 per cent depending on the size of the loan and duration undertaken.
They also charge a default rate of below 10 per cent depending on the customers as majority prefer taking up a new loan to retire an old one.