“We regret to info you that Tala is no longer offering loans in Tanzania. We appreciate the opportunity to serve you, and wish our loyal customers continued success in your financial journeys. You can use our paybill number to pay outstanding balances.”
The announcement comes just months after the company, together with Vodacom Tanzania, were charged with economic crimes in Dar Es Salaam for causing the Tanzanian government the loss of $2.5M in fraudulent use of their networks under the Economic and Organized Crime Control Act, 2002.
Tala has been ranked the second best mobile loans provider in Kenya and considers this to be its prime market. The Tanzanian market however is a whole different story for Tala.
Despite entering the Tanzanian market in 2014 together with M-Pawa and Timiza, Tala has been unable to capture the market as well as its contemporaries, which could also have contributed to its market exit.
The Tanzanian digital credit market stands as follows:
1/5 of Tanzanian phone owners have taken a digital loan
Digital borrowers are 3 times more likely to have a bank account than non-borrowers
1/3 of digital borrowers use the loan for business
72% of digital borrowers are self-employed
60% of digital borrowers had a digital loan in the last 90 days
1/3 of digital lenders have defaulted on a digital loan
The digital credit market dominance stands as followers:
M-Pawa – 48% of digital borrowers use the service (Appx. 5M subscribers)
Airtel Timiza – 39% of digital borrowers use the service