Digital money lending platform, Tala, is set to start issuing grants to its customers ,who have been worst hit by the Covid -19 pandemic as a way responding to their economic needs.
The grants will be targeted to those in Micro, Small and Medium Enterprises (MSME) to help them restock their businesses as well as those who have been on the platform for over three years and have a good record of loan repayment.
Speaking to Kenyans.co.ke, Tala Country Growth Manager, Annstella Mumbi, noted that those in the said sector have been the most affected by the pandemic since early 2020.
“I think there are ways that the industry, digital lenders and other lenders, can work with the regulators to figure out what is the middle ground is," stated Mumbi.
She added that the grants will range from Ksh10,000 to Ksh100,000 and that they will be directed to MSMEs in different sectors of the economy.
“Currently, MSMEs form 60 per cent of our borrower base and through our research and observations, we found that this was the segment that had been most adversely affected by Covid-19. Most businesses had shut down or experienced a large reduction in sales revenue. As such, we asked customers what they needed most in terms of support from us and the Jijenge na Tala business grant program was born,” she told Kenyans.co.ke.
The pilot has already seen 30 companies benefit from the non-refundable grants and free business skills training at inception and is expected to continue growing into 2022.
A recently released barometer report by the Digital Lenders Association of Kenya (DLAK) indicated that more than half of the credit taken goes to business advancement.
Education and emergency followed closely as the top three priority reasons why Kenyans takes credit from digital platform.
“With the economy bouncing back, we are feeling extremely optimistic about the future, just being able to reach a lot more Kenyans," added Mumbi.
The advent of digital lending has opened the country’s credit sector bringing on board millions of unbanked Kenyans an upward trend that Mumbi says needs to be incentivized so as to avoid undoing all the good that has been achieved.
“Fintechs will continue to revolutionize the market through thinking of new and unique ways of leveraging tech to reach more people."
Currently, over 16 million Kenyans are actively involved in the credit market, with more than half taking their credit from digital platforms.