Nairobi News

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Covid-19: Tala leaves its customers high and dry

Mobile financial services firm, Tala, has stopped issuing loans to their customers because of the coronavirus.

The move by the digital lender has left many of its customers who survive on quick loans in limbo.

Many have been unable to meet their monthly demands after paying their loans and denied another.

Some customers, who spoke to Nairobi News anonymously, said they did not know how they will meet their demands this month.

“Normally I get paid and I pay my loan to Tala, but it has been two weeks now after I paid back, they keep telling me that they are reviewing my loan and they will disband it after the review,” a borrower said.

Another one said that he survives on the loan.

A check on Tala’s social media pages showed angry customers majority who questioned their mode of business.

But speaking to Nairobi News, Tala Head of communications, Kevin Kaburu said they had to make operational changes to keep their employees and their families safe during the Covid-19 crisis thus resulting in customers experiencing longer-than-usual wait times on loan decisions and customer support inquiries.

“Tala has not paused lending. Tala is prioritizing existing customers as well as Tala businesses that provide essential services to their communities, to ensure we are directing resources to areas of greatest need during this time. As a result, customers may experience longer-than-usual wait times on loan decisions and customer support inquiries. We are committed to continue serving our existing customers of good standing,” said Mr Kaburu.

On being listed on CRB, he said that it is worth noting that Tala’s loan decisions are based on a range of criteria and data points beyond CRB including customers’ financial history with Tala.

“We understand that some customers may not be able to meet their due date as a result of Covid-19. For these customers, Tala is waiving late fees and providing personalised payment plans. We are committed to developing unique payment arrangements that meet our customers’ needs during this time and ensuring that our customers can maintain their good relationship with Tala,” said Kaburu.

Tala disburses loans between Sh1,000 and Sh30,000 to a mobile wallet with more than 85 percent of Tala’s customers receiving credit in less than 10 minutes.

Tala has more than 215 employees across offices in Santa Monica, Nairobi, Dar Es Salaam, Manila, Mexico City, Mumbai, and Bangalore.

There has been panic among Kenyan employees concerning the future of their jobs and livelihood as cases of coronavirus in the country continue to rise.

In a state of the nation address last month, President Uhuru Kenyatta urged MPs to suspend the listing on CRB of any persons in micro small or medium enterprises whose loan accounts were due or in arrears effective April 1.

“This is to protect jobs for our people and uncertainty for employers as we face this epidemic,” he said.

Last week, Central Bank of Kenya (CBK) Governor Patrick Njoroge said banks will provide relief to borrowers on personal loans based on individual circumstances arising from the novel coronavirus (Covid-19) pandemic.

He pointed out that about 28 percent of lending in the country comprises personal loans. To cushion Kenyans, he said all current loans as at March 2, 2020, will be eligible for the one-year relief.

Dr Njoroge indicated that the relief will also apply to mobile money borrowers.

“Banks will review requests from borrowers to extend loans due for up to one year. This is just the first step we have taken. We will come back with more,” said Dr Njoroge. He was speaking at State House, Nairobi, during a meeting between President Uhuru Kenyatta and bankers.

More than 1.1 million people have been diagnosed with the Covid-19 disease worldwide as the death toll exceeded 54,000 while about 220,025 patients recovered.

As other employees are working remotely, some have been forced to take unpaid leave or even pay cuts.