Jumia Kenya Teams Up with Watu Credit for Flexible Smartphone Financing

Jumia, an e-commerce platform, and Watu Credit, a non-bank financial services company, have partnered to offer affordable smartphones at affordable prices, which can be paid in installments.

Smartphone penetration currently stands at 80%. However, many individuals still use low-end devices due to cost barriers. Consequently, this partnership is focused on financing both affordable and sustainable smartphones.

Details of Partnership

The two companies are set to introduce a Buy Now Pay Later (BNPL) program, enabling consumers in Kenya to acquire smartphones with deferred payment options. Customers will have the flexibility to make payments on a daily, weekly, or monthly basis. This partnership aims to enhance accessibility to leading smartphone brands, including Samsung, which is currently the sole brand financed by Watu Simu.

It is essential to note that there is a stipulation; continued use of your mobile device will require payment. This requirement arises from the implementation of IoT-based locking software by Watu Simu, which ensures that customers must remit payment to retain access to their phones.

This situation could unexpectedly impact some individuals, especially if the device hasn’t been paid for on that day, week, or month, depending on the payment schedule. If they find themselves in an emergency, they may need to use an alternative phone to make a payment, allowing them to unlock their primary device. This process can be quite inconvenient.

Benefits to Kenyan Customers

This partnership will prove to be highly advantageous for individuals in Kenya who are unable to purchase premium smartphones outright. It will provide them with access to these devices without the financial burden of an immediate full payment.

The Buy Now Pay Later model enables adoptable payment schedules, where consumers can choose to make payments daily, weekly, or monthly, aligning with their income streams and financial capabilities.

"Access to affordable smartphones has transitioned from being a luxury to becoming an essential requirement," stated the manager of Watu Credit. This initiative aims to enhance smartphone ownership among Kenyans, thereby facilitating their connection to the digital ecosystem. This connectivity is also vital for engaging in the digital economy, as well as for accessing online education, healthcare services, and financial resources.

“Smartphones are among our best-selling products,” said Vinood Goel, CEO of Jumia East Africa. “By collaborating with Watu, we can broaden access to connected devices, making it easier for Kenyans to engage in the digital economy.” 

What this Means for the Kenyan Market

This partnership will see a rise in smartphone penetration in the Kenyan market, as Kenyans who don’t have the financial capabilities to own a premium smartphone will now do so.

While other competitors, such as Safaricom, are primarily focused on entry-level smartphones, this new partnership between Jumia and Watu Simu is targeting consumers who want to own “premium”  brands, with a switch in emphasis on Samsung smartphones and tablets.

The partnership will combine Jumia’s robust online retail platform and a wide logistical reach with Watu Credit’s experience in asset financing, which has a proven track record in the buy-now-pay-later model, especially in the boda boda sector.

Unlike Safaricom’s model, which is tied to its own network and services, Jumia-Watu's offering works with any network, and this can appeal to customers from other networks (Airtel, Telkom) who may have felt excluded from Safaricom’s financing option.

Under the Safaricom umbrella, they are mainly focused on the Transsion brand, which includes Infinix, Tecno, and Itel. Now with the Jumia-Watu, there will be increased brand diversity with a focus on brands like Samsung, which will introduce greater variety in the financing market.

How to Get Started.

This financing opportunity will be facilitated by Jumia agents, with a vision to transition towards a fully digital process in the future. If you wish to acquire a device through the buy-now-pay-later option exclusively provided by Watu Simu, please adhere to the following steps:

1. Visit any Watu Simu store.

2. Select a Samsung device that is eligible under the Watu program.

3. Obtain pre-approval for your application.

4. Make your required payment.

5. Allow 5 to 10 minutes for the verification process to be completed. Once verified, your phone is verified, and you can leave with your new device

To qualify for a device exclusively from Watu Simu, you must meet the following requirements: 

1. Have a valid National ID.

2. Have no active loans with Watu.

3. Be at least 18 years old.

4. Have no active mobile transaction line.

5. Provide contact details for a next of kin.

6. Make a minimum down payment.

Make sure you fulfill all these criteria to be eligible.

These are likely to be the same requirements between the two partners; however, we will have to wait and see, and I will give an update once I get the full information.

Conclusion 

This partnership will help Kenyans embrace a new digital era, simplifying their lives by connecting them to the digital economy. They will gain access to online education, healthcare services, and a range of financial tools. Additionally, this initiative will offer Kenyans alternatives to competitors, enabling them to access premium brands at affordable prices.