In a significant leap for Kenya’s digital landscape, Pan-African asset finance provider, Watu, recently marked a milestone by reaching over one million smartphone sales through its Watu Simu subsidiary. This achievement underscores the growing demand for accessible financing options and the importance of digital connectivity in Kenya’s economic development.
Watu’s entry into Kenya’s mobile asset finance market has been nothing short of transformative. Just 23 months after launching Watu Simu, the firm reached this millionth device sale, effectively setting a new standard for smartphone financing in Kenya. Partnering with renowned device manufacturers like Samsung Mobile, Watu Simu’s innovative Buy Now, Pay Later (BNPL) model has made it possible for more Kenyans to access high-quality mobile devices—an essential tool in today’s digital age.
The success of Watu Simu highlights a powerful shift in how Kenyans and Tanzanians acquire smartphones, with a strong focus on financial inclusion. Mobile devices, which have become essential for navigating the digital economy, typically cost between Ksh 45,000 and Ksh 80,000. Such prices are often a significant barrier for low- to middle-income earners who may not have the capital to make upfront payments.
Mr. Kevin Michuki, Head of Growth at Watu Simu, emphasized that the firm’s BNPL approach is driven by the mission to bridge the digital divide. “At Watu Simu, we are celebrating this millionth customer milestone as it confirms the growing demand for sustainable financing models in the race to bridge the digital divide,” he said. The company’s innovative financing model enables customers to purchase smartphones in affordable installments, making these essential devices accessible to a wider population, particularly in economic sectors that rely on digital connectivity.
Watu Simu’s financing solutions have gained traction among Kenyans engaged in digital enterprises. According to Mr. Michuki, over 70% of the company’s clientele consists of gig workers involved in ride-hailing, online delivery, and marketplace businesses—jobs that require constant digital connectivity to function efficiently. For individuals working in these sectors, owning a smartphone is not merely a luxury; it is a necessity for income generation.
The smartphone has evolved into a primary tool for economic activity, enabling gig workers to connect with customers, manage transactions, and access financial services. Watu Simu’s accessible financing model allows these workers to acquire devices that meet their operational needs, enhancing productivity and helping to sustain their livelihoods.
With over 1.5 million mobile device customers, Watu has emerged as one of the fastest-growing smartphone financiers in sub-Saharan Africa. Watu’s innovative approach aligns with broader trends in Africa’s digital economy, where mobile device adoption is rapidly transforming communication, banking, and commerce. As a result, smartphone access is seen as a vital step in enabling economic growth and enhancing financial inclusion.
Watu’s expansion beyond Kenya and Tanzania reflects the region’s demand for mobile financing solutions and underscores the impact of mobile connectivity on economies across Africa. By reducing financial barriers to smartphone ownership, Watu is contributing to a wave of digital empowerment that is opening up opportunities for individuals and businesses alike.
Smartphone access has a direct impact on Kenya’s digital economy, which is projected to contribute Ksh 662 billion to the country’s GDP by 2028, according to the GSMA report, Driving Digital Transformation of the Economy in Kenya. This growth is attributed to increased mobile adoption, strategic policy reforms, and digitalization in sectors such as agriculture, manufacturing, transport, and trade.
The GSMA report also projects the creation of 300,000 new jobs as the digital economy expands, as well as increased tax revenues estimated at Ksh 150 billion. These benefits underscore the potential of digitalization to improve livelihoods, strengthen economic resilience, and foster inclusive growth.
With mobile penetration rates reaching 128.3% in Kenya, according to the Communications Authority (CA) of Kenya’s 2023/24 Financial Year report, it is clear that digital tools are integral to modern life. The CA’s statistics also reveal that smartphones account for 68.3% of all connected mobile devices, highlighting a shift in preference towards devices that support internet connectivity and other advanced features.
Data from the CA’s Fourth Quarter Sector Statistics Report for 2023/24 reveals a steady increase in smartphone ownership, with 35.2 million smartphones connected to mobile networks by June 2024. Feature phones, on the other hand, have seen a slight decline, suggesting a gradual transition to smartphones as Kenyans increasingly recognize their importance in digital engagement.
This shift is propelled by several factors, including the need for digital banking, access to social services, and participation in the gig economy. Watu’s affordable financing model addresses this shift by making smartphones more accessible to the average Kenyan, thereby encouraging broader digital engagement.
While Watu’s financing model is making strides, Kenya still faces challenges in achieving universal smartphone access. One key barrier is the high cost of smartphones relative to the income levels of many Kenyans. Although Watu and similar providers offer financing options, there remains a need for policy interventions and partnerships that can further reduce these costs.
Moreover, as Kenya moves toward digitalization, there are other challenges to consider, such as digital literacy and internet access. While smartphone ownership is rising, users need adequate training and support to utilize these devices effectively. Government initiatives, non-profit programs, and partnerships with private firms like Watu could play a pivotal role in enhancing digital skills among Kenyans, especially those in rural areas.
Partnerships are key to addressing Kenya’s digital divide, and Watu Simu’s collaboration with manufacturers like Samsung demonstrates how alliances can expand access to technology. These partnerships allow for bulk purchases, reducing costs and enabling financing providers to offer competitive rates.
To ensure sustained growth, Watu Simu and other financing providers can continue to build relationships with both local and international partners. By collaborating with telecom providers, tech companies, and even government agencies, they can further reduce the cost of smartphone acquisition, making devices more affordable and accessible.
Looking ahead, Watu Simu’s growth trajectory suggests that asset financing for mobile devices will continue to be a crucial component of Kenya’s digital economy. As demand for digital tools increases across sectors, the company is well-positioned to scale its operations, potentially reaching millions more customers within the next few years. This expansion will contribute not only to Kenya’s digitalization efforts but also to the wider goal of financial inclusion in Africa.
Additionally, as more Kenyans gain access to smartphones, the potential for digital financial services, e-commerce, and mobile-based health and educational services expands. Watu’s role in facilitating smartphone access could thus have far-reaching implications, transforming not only economic but also social outcomes for millions of Kenyans.
Watu Simu’s milestone of one million smartphone sales represents more than just a business achievement—it is a testament to the potential of digital connectivity to empower individuals, drive economic growth, and enhance social inclusion. By bridging the digital divide, Watu is playing a pivotal role in enabling Kenyans to participate more fully in the digital economy, transforming lives in the process.
As Kenya’s economy continues to digitalize, the demand for affordable mobile devices will only increase. Watu Simu’s innovative financing model meets this demand while empowering gig workers, small business owners, and everyday Kenyans to access the tools they need to thrive. With partnerships, policy support, and continued innovation, companies like Watu are setting the stage for a future where technology and opportunity are within reach for all.
