How Safaricom’s Lipa Mdogo Mdogo KES. 20-a-day Smartphone Plan Works

Safaricom’s much talked about Lipa Mdogo Mdogo financing plan has gone live. It is a new campaign by the company to not only deliver cheap Android phones – in partnership with Google, but also a plan for the company to shift as much of their customer base as possible from 2G Networks to the 4G network.

Safaricom CEO has said they’re committed to achieving full 4G coverage across the whole country by the end of this year. Currently coverage is at 77% with only 17% 4G Smartphone penetration.

The campaign is targeting a million new customers with this new plan that seems to only have one device – the Neon Ray PRO.

Here’s how it works:

There’s two things: First one needs to qualify for the plan, then there’s a payment plan.

Qualification:

• The campaign only targets customers who are on the 2G Network. So you will not qualify if Safaricom knows you’re already a 4G customer.
• Dial *544# to check if you qualify for the Lipa Mdogo Mdogo Plan
• One must be 18 Years and above, and have used their SIM Card for at least a year, and have been active on M-Pesa and calls.

Payment:

• If you qualify, you will be asked to go to a Safaricom Shop
• There you will make KES. 1,000 down payment and pick up a brand new Neon Ray Pro phone
• An app on the device will be used to make the daily KES. 20 payments.
• One can pay extra amounts when they’re in a position to.
• There’s also a 3-day grace period for defaulted payments before the device locks only allowing access to the app for payment.
• After the first 7 days of payment, customers will get free YouTube bundles.
• Payment plan runs for 9 Months.
• Which means about a maximum of KES. 6,580 as the total cost of the handset under this plan. That is in contrast to KES. 5,999 original price of the phone.

There’s no insurance currently for the devices. So customers must take care of their devices very well – preventing loss or damage. Safaricom argues that it can’t be hacked, or used when it is stolen so it will be useless to steal one. However, should one lose their device, they will need to continue with the payment plan.

Compared to M-Kopa which is way more expensive, and also quite exploitative, the new campaign by Safaricom feels more balanced. Though there’s only one device currently, Safaricom has said there are plans for more devices in the future depending on the success of this first campaign.

Last year, Safaricom sold over 900,000 Neon devices. And this was done without this financing plan. It means this year, we may see more sales given Safaricom is targeting a million 2G customers with just the Neon Ray Pro despite there being other Neon devices.