Nokia opts for device financing to drive salesThursday February 10 2022
HMD Global, the maker of Nokia-branded smartphones is targeting businesses for device financing to help increase adoption of its phone and grow its markets share.
The Finnish mobile phone manufacturer said it will work with strategic partners to drive its business in the Kenyan market.
The device financing will see the firm provide phones to the partners who will then sell the devices on credit to buyers at an interest rate. The firm is already working with Kenya-based financial technology firm M-Kopa which provides financial solutions for solar lighting products, televisions, fridges and smartphones.
“There are specific channels where we are seeing a lot of growth like device financing. Beyond that is a lot of strong partnership happening with key retailers and operators such as Safaricom and Telkom, while shaping also our device to consumer demand,” said Gopher Ogembo, senior business manager, East Africa HMD Global.
“One of the partners that the firm started with are M-Kopa, and Delight and we are engaging others.”
The move is part of the strategy for expansion in the Kenyan market where HMD Global is ranked number 2 for total mobile phone shipments of both smart and feature phones according to data from mobile phone tracker, International Data Corporation (IDC) in the nine months to September 2021.
Customers pay a deposit, starting from Sh2,000 with partners who also set interest rates, repayment period and total cost.
The phone maker provides a software solution HMD Softlock, enabling the partner lock the device until the subscriber makes the payment. This is meant to serve as security to ensure repayment and reduce defaults.
“Our partner can extend this financing offers to a much larger group of consumers because the software that makes the offer hassle-free and you will have to do less traditional credit checks,” added HMD Global chief executive Florian Seiche.
“That has really helped a lot to drive this fast adoption and grow the business momentum. We are seeing a lot of interest in the similar collaborations form other partners.”
This model of product purchase has gained prominence in the country as consumers seek to buy items with flexible means of paying them.
Others companies include such as Beba Sasa, Lipa pole pole by Safaricom in partnership with KCB and Lipalater.
HMD Global is made up of the mobile phone business that Nokia sold to Microsoft in 2014, then bought back in 2016.
HMD’s smartphones run Google’s Android One software.