Kenya’s smartphone market is undergoing transformation, fueled by skyrocketing handset prices and an unprecedented rise in hire-purchase financing schemes. Since 2019, the average cost of a smartphone has surged from Ksh5,955 to Ksh18,979 in 2025, more than tripling in just six years.
The sharp increase has pushed many Kenyans to embrace financing models that spread payments over time, giving rise to a booming hire-purchase sector with 1.7 million active accounts in 2024. Leading this revolution are M-Kopa and Watu Simu, each boasting over one million customers.
Watu Simu has carved out a niche offering flexible financing for Samsung Galaxy smartphones. Applicants undergo a simple process requiring a National ID, mobile money account, and next of kin details and can walk out of a store with a phone in less than 20 minutes. Customers make a minimum down payment and then pay weekly installments over 52 weeks, with no hidden fees. Devices come with a 24-month warranty and perks such as one-time accidental screen repair for select models.
M-Kopa, on the other hand, markets itself with the slogan “Pay Easy. Own Easy.” The company provides not just phones ranging from its X-Series to Samsung’s A-series but also bundled services like device protection, affordable data, and health cover. After three months of timely payments, customers gain access to discounted digital loans, turning smartphones into gateways for financial inclusion.
But this rapid expansion has triggered alarm among policymakers and consumer advocates. Embakasi East MP Babu Owino has vowed to introduce a Bill in Parliament to regulate what he calls “predatory practices” in smartphone financing. “M-Kopa phones, I am coming for you. I intend to introduce a Bill in Parliament to regulate predatory practices in consumer financing, particularly in the mobile phone sector,” Owino declared.
He cited cases where a handset valued at Ksh12,000 ends up costing as much as Ksh30,000 under current financing terms.
“Even under the principle of willing buyer–willing seller, consumers must be protected from exploitation. Every Kenyan deserves access to affordable mobile technology, but not at the cost of crippling debt,” he added.
Consumer protection groups back Owino’s push, noting rising complaints over hidden charges, high effective interest rates, and aggressive debt collection tactics. They argue that while financing models have widened access, they have also exposed vulnerable households to long-term debt traps.
