A large majority of borrowers on Kenya's digital lender Tala are taking loans above Sh25,000.
This is according to the creditor's report released on Tuesday which shows 52 per cent of its customers prefer taking loans between Sh25,000 and Sh30,000.
The research, whose goal was to ascertain Kenyans’ financial literacy levels, health and resilience, surveyed over 423 customers from the Fintech’s client base.
It established that 78 per cent of Tala's clients take loans for business related reasons mainly expenses or to add stock.
The report also indicates that eight out of every 10 respondents have side hustles other than their main income source.
Presenting the findings, Tala User Research Manager Teddy Kahiro pointed out that one of the survey's key discoveries from the survey was that Kenyans’ financial health and resilience is improving three months into the new year as the country’s economy opens up after easing of some of the Covid-19 restrictions.
Fifty-nine per cent of Tala borrowers said they have increased their borrowing in the last six months.
The lender said it would comply with the Central bank's gazetted regulations on digital lenders and has submitted all required documents for licensing.
The regulations published on March 18 aim at addressing high-interest rates, unethical debt collection practices, and the misuse of personal data by some digital lenders.
CBK governor Patrick Njoroge said the Digital Credit Providers regulations seek to address public concerns given the significant growth of digital lending, particularly through mobile phones.
Major players in the digital money lending space include Tala, Branch, M-Shwari, M-Coop and IMoney.
"The regulations provide for inter alia the licensing, governance, and lending practices of DCPs. They also provide for consumer protection, credit information sharing, and outline the Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) obligations of DCPs," Njoroge said.
He said that the regulations will sanitise the sector prone to consumer abuse in total disregard of the country's National Payment System.
CBK says a DCP shall not invite or collect deposits in any form, including the taking of cash collateral as security for loans, in the course of carrying out digital credit business.
