Safaricom in partnership with Google plans to launch a device financing program that allows low-income earners in Kenya to get 4G smartphones for just 20 Kenyan Shillings (N74) per day.
According to the company, the package is aimed at empowering customers currently on 2G devices to upgrade and enjoy high-speed internet connectivity with 4G smartphones.
Themed Lipa Mdogo Mdogo, the program is based on insights and learnings from Safaricom’s Maisha Ni Digital campaign launched in April 2019 which saw over 1 million customers acquire 4G enabled devices. The new campaign is currently in a pilot phase and is expected to be launched by the end of June.
Although Kenya has a high rate of mobile phone penetration, a large percentage are using features or 2G phones. Google estimates that about 60% of mobile phone users in the country use 2G phones.
According to Safaricom CEO, Peter Ndegwa, the tough economic environment is the main reason people cannot afford smartphones.
“Despite the high percentage in mobile telephone penetration in Kenya, there remains a large population in this country that still uses 2G phones; tough economic environment being the main reason they cannot afford smartphones. We intend to bridge the gap for these consumers by offering device financing programme,”Peter Ndegwa
He added that the company intends to bridge the gap by providing affordable payment plans which low-income earners can take advantage of to own their own 4g smartphones.
With the new campaign, Safaricom seeks to empower one million customers with 4G smartphones by offering them the opportunity to pay just KES 20 per day.
Safaricom Device Financing Offering
Although the company didn’t reveal the make and specs of the 4G smartphones they intend to offer, if it is the same as the ones offered during its 2019 campaign, customers will get the Neon Ray (4G) priced at about N15,000 (KES 3,9990) or the Neon Nova (4G) N22,000 (KES 5,999).
This means that at if a customer collects he will pay back the cost price in about 200 days or 300 days if he opts for the Neon Nova.
However, looking at the recent device financial offering where the company partnered with Samsung and M-Kopa to offer customers smartphones for 60 Kenyan Shillings per day, the device offering wouldn’t be without profit.
The Safaricom and Samsung partnership offered customers the Samsung Galaxy A10s. However, a one time deposit of KES 3,499 was required before the KES 60 per day instalments. This new deal may therefore also have a one-time deposit clause, though it wasn’t announced.
Secondly, the daily payment of KES 60 per day is for 365 days, meaning that the total cost of the phone will be about KES 25,399. The same device costs about KES 13,000 on Jumia.
This means that although the deal appears good, customers may end up paying almost double the shelf price. Also if the phone gets damaged or lost before the customer is done paying, the customer still has to continue making daily payments as insurance was not included in the offering.
If a customer fails to make the daily payment the device is automatically locked but access to make the payment on M-Pesa will still be available.
In summary, the KES 20 daily payment for a smartphone sounds like a good deal as it will enable more low-income earners to access more opportunities, be it learning, working or expanding their businesses online.
However, if this offering follows the steps of the Samsung offering, customers will have to strong weigh the benefits as they may end up paying almost double the price of the device.
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