Watu Africa, a leading asset financier, has given out 1.46 million smartphone loans in Kenya in the last year, according to its latest sustainability report. This is a huge uptake of the Buy-Now-Pay-Later (BNPL) model and shows Kenya’s growing digital economy and increased access to technology for a larger segment of the population.

Watu Africa’s Smartphone Financing Success

Kenya is Watu Africa’s most successful market for its smartphone financing program, Watu Simu. The report shows that nearly half (47.96%) of its total smartphone loans across seven countries were given out in Kenya. Watu Simu allows customers to buy smartphones and pay for them in installments, removing the barrier of high upfront costs for many potential users.

Watu’s Regional Footprint

While Kenya leads, Watu also operates in Uganda, Nigeria, Rwanda, Sierra Leone, South Africa and DRC. The company has given out a total of 3.059 million smartphone loans across these markets. Tanzania comes second with 600,000 loans and Uganda with 397,500 loans.

The BNPL Model: Bridging the Technology Gap

The BNPL model which allows customers to pay for assets like smartphones, motorcycles and solar lights in installments has become a key driver of financial inclusion in Kenya especially for low-to-middle income earners. By spreading the cost over time, these payment plans make essential technology accessible to those who would otherwise be excluded. Note that the total amount repaid includes a premium (interest and fees) due to the credit element of the financing.

Positive Socio-Economic Impact

Despite concerns that BNPL schemes can lead to expensive debt, Watu’s own customer surveys show positive socio-economic benefits:

  • 40% of Watu Simu customers in Kenya reported an increase in income after getting a device.

  • 30% of customers got new jobs.

  • The financing program is credited with increasing digital participation, with customers in rural areas reporting 30% increase in access to digital financial services.

This is actively closing the urban-rural digital divide in Kenya and increasing participation in the digital economy nationwide.

Expanding Portfolio and Financial Outlook Beyond smartphone financing, Watu Africa is a big player in asset financing for motorbikes, electric bikes and three-wheelers (tuk-tuks) with 2.63 million active loan accounts in Kenya.

The company has set ambitious growth targets to reach four million active loans by end of 2025 with nearly three million of those being smartphone financing.

Watu’s financials reflect its growth with $230 million (KSh 29.7 billion) revenue and $6.5 million (KSh 839.7 million) net profit last year. For this year, the company is projecting $340 million (KSh 43.9 billion) revenue and $8 million (KSh 1 billion) net profit.