The number of smartphone loans issued to Kenyans via asset financier Watu Africa hit 1.46 million last year, pointing to the rising craze of buy-now pay-later.
Watu’s annual sustainability report shows the firm, which also has operations in Uganda, Nigeria, Rwanda, Sierra Leone, South Africa and the Democratic Republic of Congo (DRC), has enjoyed most of its success in Kenya.
The 1.46 million smartphones financed in Kenya makes up nearly half (47.96 percent) of the phones sold by Watu across the seven markets through its Watu Simu programme that is structured on giving customers the devices and then allowing flexible instalment payments.
The total cost to the customers typically includes a substantial premium compared to cash purchases of the devices, representing the impact of the credit element in the buy-now pay-later deals.
Watu report shows it has cumulatively issued 3.059 million smartphone loans across the various markets. After Kenya, Tanzanians have tapped 600,000 such loans followed by Uganda (397,500), Nigeria (215,000), DRC (202,000), Sierra Leone (89,670) and South Africa (87,983).
“Our smartphone financing programme represents more than just expanding our product portfolio --it’s about democratising access to the digital economy,” said Andris Kaneps, founder of Watu Africa.
The firm says since 2022 alone, it has financed over 1.8 million devices across the seven countries, with more than one million devices in Kenya alone.
The buy-now pay-later model is gaining popularity, especially among low-income people seeking to acquire assets such as phones, motorcycles, televisions and solar lights. Under the model, customers usually acquire goods on credit with periodic payments set either daily, monthly, quarterly, or yearly.
The model, alongside other formats called hire purchase and Safaricom’s Lipa Mdogo Mdogo programmes, have grown in popularity.
The 2024 FinAccess Survey showed Kenyans estimated to have used hire purchase or Lipa Mdogo Mdogo services tripled to 1,751,994 last year from 579,242 in 2021.
While the buy-now pay-later model has come under accusations of hooking people on expensive debts, Watu says its own surveys have shown that nearly 40 percent of Watu Simu customers in Kenya reported income growth after acquiring a device while 30 percent accessed new jobs.
“Smartphone financing has unlocked critical digital financial services, particularly benefiting rural populations, where users experienced a 30 percent increase in digital participation and helped narrow the urban-rural gap,” added Watu.
Smartphones are only part of Watu’s asset finance portfolio. The company has also financed 4,850 motor bikes, some 2,000 electric bikes and 140 three-wheelers (popularly called tuk-tuks). Together with smartphones, the firm closed last year with 2.63 million active loan accounts in Kenya.
The company forecasts a portfolio of more than four million active loans by the end of 2025, with nearly three million of them tied to smartphones.
Watu said it posted $230 million (Sh29.7 billion) in revenue last year, earning it $6.5 million (Sh839.7 million) net profit. The firm did not provide a breakdown of earnings per market even as it projected revenues and net profit of $340 million (Sh43.9 billion) and $8 million (Sh1 billion), respectively this year.
Watu targets to sustain the momentum in smartphone loans and plans to finance over one million purchases this year across the seven markets.
“Our smartphone financing programme isn’t just about devices—it’s about building the digital infrastructure that will power Africa’s economic transformation,” said the firm.
