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Tech Startups Are Flooding Kenya With Apps Offering High-Interest Loans

Tala and other companies are bringing quickie loans wrapped in the language of “financial inclusion” to developing countries.

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David Saitoti, a 34-year-old substitute teacher and taxi driver in Nairobi, says he borrows and repays loans from at least five apps each month.

David Saitoti, a 34-year-old substitute teacher and taxi driver in Nairobi, says he borrows and repays loans from at least five apps each month.

Photographer: Roopa Gogineni for Bloomberg Businessweek

Patricia Lele waits for nightfall to go to work. As the sun sets in Kitale, in western Kenya, she hikes up her 2-year-old daughter on her hip, gathers some of her other eight children, and sets off down a dirt road. When she reaches the center of town, she spreads a blanket on the sidewalk outside a grocery store and carefully lays out her wares.

Lele makes beads out of brightly colored paper that she scavenges from the town dump, stringing them into bracelets that she sells for a few dollars apiece. But tourists are rare in this maize-growing hub, especially after dark, when teenagers stumble down the street, holding Sprite bottles to their nose to sniff glue. Lele considers herself lucky if she makes $5 in a night, enough for bus fare home and porridge for her family the next day.