Watu’s milestone in Kenya: over one million smartphones sold through buy now, pay later financing

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Asset financier Watu says it has sold more than one million smartphones in Kenya on credit through its Watu Simu unit, a milestone it reached at the end of October 2024, just 23 months after it entered the mobile device financing market.

Watu Simu works with device makers including Samsung Mobile and lets customers take a phone after a down payment, then clear the balance in weekly instalments. The company confirmed that it financed its millionth smartphone customer at the end of October, according to reports by KBC and Business Now.

What Watu Simu said

Watu Simu’s Head of Growth, Kevin Michuki, said the numbers show strong demand for buy now, pay later (BNPL) phone financing in Kenya.

“At Watu Simu, we are celebrating this millionth customer milestone as it confirms the growing demand for sustainable financing models such as Buy Now, Pay Later products in the race to bridge the digital divide,” Michuki said.

He added that most of the phones are used to earn a living. “Our customer base data confirms that most devices acquired have been deployed in active economic production sectors. More than 70% of our clients are involved in digital enterprises, including ride-hailing, online delivery and marketplaces, among other gigs that require smartphones for efficient operations.”

Michuki said the firm is working to close the digital divide in Kenya and Tanzania. He noted that good smartphones cost between about KSh 45,000 and KSh 80,000, a price most buyers cannot pay at once. Watu also said that across its markets it now has more than 1.5 million mobile device customers, making it one of the fastest-growing smartphone financiers in sub-Saharan Africa.

Why phone financing is growing in Kenya

The milestone comes as Kenyans buy more smartphones. The Communications Authority of Kenya’s sector statistics report for the fourth quarter of the 2023/2024 financial year (April to June 2024) put the number of mobile devices connected to networks at 66.1 million, a penetration rate of 128.3%. Smartphone penetration stood at 68.3%, ahead of feature phones at 59.9%.

Many of the remaining feature phone users cannot afford a mid-range smartphone in cash. Phone financing lets them spread the cost, and for riders, delivery agents and online sellers the phone pays for itself through work. Watu, which is best known for financing boda boda motorcycles, competes in this space with other phone financing offers such as Safaricom’s Lipa Mdogo Mdogo and Lipa Later.

How Watu Simu phone financing works

Customers buy at partner shops that stock Watu Simu, pick a supported Samsung Galaxy phone, get a pre-approval, pay the down payment and wait for verification before the phone is activated. Tech site TechArena, which reviewed the onboarding process, said it takes about 20 minutes and that repayment runs in weekly instalments over 52 weeks. Watu Simu’s listed requirements include:

• An original national ID
• Being at least 18 years old
• No active loan with Watu
• An active mobile money line
• A next of kin who can be reached for verification
• The minimum down payment for the chosen phone

Repayments are made through M-Pesa Paybill 650880, using the borrower’s national ID number as the account number.

What buyers should watch

Phone financing is convenient, but it costs more than paying cash. Before signing, compare the total amount you will pay over the 52 weeks with the shop’s cash price, and make sure you can meet the weekly instalment even in a slow week. Financed phones are typically locked if a payment is missed, and some customers in the sector have complained about high prices and aggressive collection.

If you are comparing credit options, our guides to loan apps in Kenya and Fuliza explain the costs of short-term borrowing. If a lender harasses you, see how to report it to the ODPC and CBK.

Update

Scrutiny of the sector has grown since Watu’s milestone. Members of Parliament have since examined complaints against buy now, pay later and asset financing firms, as we reported in MPs probe BNPL asset financiers over 110 complaints. Gig workers who rely on a financed phone can find delivery, sales and driver openings on Job in Kenya.

Frequently asked questions

How many phones has Watu Simu sold in Kenya?

More than one million. Watu said it financed its millionth smartphone customer in Kenya at the end of October 2024, 23 months after entering the market.

What is the Watu Simu Paybill number?

Repayments go to M-Pesa Paybill 650880, with your national ID number as the account number.

What do I need to get a phone on credit from Watu Simu?

An original national ID, be 18 or older, have no active Watu loan, an active mobile money line, a reachable next of kin and the down payment for the phone you choose.