Digital lifestyle company, Tigo, has announced the launch of a nano lending product as part of its range of mobile financial services. The new product will not require collateral and offers Tigo Pesa users access to small loans, according to the company.

Ruan Swanepoel, Tigo Head of Mobile Financial Services says the product, called Tigo Nivushe is available to any Tigo Pesa customer and offers different lending periods with variable administrative costs based on the length of tenure.

"The loans – with an average of Tsh 10,000 (approximately US$5) – are processed in real-time and funds transferred within minutes. As customers build up their credit history they are able to borrow higher amounts with lower administration fees. Loans are delivered directly to the mobile wallet so customers can immediately use the funds to pay bills, transfer to others, or cash out at the thousands of agents across the country," said Swanepoel.

He added that no security is required or taken and the loan product has been designed to be transparent and foster responsible lending. "Tigo Nivushe has been designed to encourage responsible lending. Previous mobile behaviour is used to determine suitable limits for loans and customers will only be able to have one loan at a time. Protection against life shocks is included as everyone will be automatically insured for the loan amount against death or permanent disability. Most importantly, as the product is fee based, no interest can be accumulated in the event of default and acquiring a loan will not affect mobile or Tigo Pesa accounts in any way."