Watu Simu Finances Over 1 Million Mobile Devices in Kenya Within 23 Months of Market Entry

In a notable stride toward digital inclusivity, Watu Simu, a subsidiary of the Pan-African asset finance company Watu, has announced it has crossed the significant milestone of financing over one million mobile devices in Kenya. This achievement highlights the growing demand for sustainable and accessible financing models in Kenya, where digital transformation has become vital for economic progress.

The milestone was achieved in partnership with renowned manufacturers like Samsung Mobile, just 23 months after Watu Simu entered the Kenyan market, underscoring the success of their innovative financing solutions.

A Game-Changing Approach to Financing Smartphones

As technology becomes essential in nearly every industry, Buy Now, Pay Later (BNPL) model has proven transformative for many Kenyans. We’ve seen lots of BNPL options arise.

According to Watu Simu’s Head of Growth, Kevin Michuki, the company’s financing options are geared toward bridging the digital divide by enabling individuals across diverse sectors to acquire high-quality smartphones.

However, as BNPL models gain traction, the importance of regulatory oversight to prevent predatory lending practices becomes essential. BNPL services in Kenya have been criticized for imposing high markups on products, sometimes as much as 200% above retail prices. Such practices can push low-income consumers into debt cycles, particularly those with limited financial literacy.

Smartphones and Financial Inclusion: A Booming Mobile Money Ecosystem

Watu Simu’s work takes place in a vibrant digital economy fueled by mobile money adoption, which surged by 3.1% in 2024, reaching 39.8 million subscriptions by mid-year. This rise is backed by the Central Bank of Kenya’s new interoperability policies, which make it easier for users to transfer money across networks, supporting a highly connected financial landscape.

The demand for affordable smartphones is evident, with the majority of Kenya’s population depending on mobile devices for essential financial services, underscoring the need for accessible device financing that Watu Simu is addressing.

The Role of Responsible Financing in Closing the Digital Divide

As Watu Simu expands, regulatory measures become critical to ensuring that consumers are protected from exploitative practices in the BNPL sector. Recent guidelines from the Central Bank of Kenya (CBK), which classify BNPL providers as Digital Credit Businesses under the 2022 Digital Credit Providers Regulations, aim to foster transparent pricing, clear disclosure of terms, and protections against exorbitant fees.

These standards set a benchmark for BNPL providers to offer fair lending terms, ensuring that the affordability of devices remains within reach for lower-income populations while protecting consumers from financial strain.

Telecommunications Growth, IMEI Regulations, and Smartphone Adoption in Kenya

The Communications Authority of Kenya’s 2023/24 report confirms that the demand for smartphones is indeed on the rise, backed by the growth of Kenya’s telecommunications infrastructure. According to the CA’s Fourth Quarter Sector Statistics Report for the 2023/24 Financial Year, Kenya had 66.1 million mobile phone connections by June 2024, achieving a penetration rate of 128.3%. Out of these, smartphones accounted for 35.2 million, reflecting a penetration rate of 68.3%, while feature phones had a rate of 59.9%.

However, new compliance regulations requiring IMEI registration starting January 2025 could impact smartphone affordability. These changes will make asset financing models, such as Watu Simu’s, even more critical, enabling customers to access essential devices without the upfront cost burden.

A Future Built on Connectivity and Responsible Lending

As Kenya continues its digital journey, companies like Watu are playing a crucial role in ensuring that the benefits of this transformation are accessible to a broad demographic. By providing flexible and responsible financing solutions, Watu Simu says it is narrowing the digital divide, allowing Kenyans from various socioeconomic backgrounds to access the tools needed for economic participation.

With projections indicating a sustained expansion of the digital economy, driven by both demand for connected services and supportive policy reforms, Kenya is on a promising path to increased digital inclusion. Watu’s milestone not only celebrates a business achievement but also reinforces the role of accessible and fair technology financing in shaping a future where every individual can participate in, and benefit from, the digital revolution.