Kenya’s mobile market is expanding quickly, with over 66 million mobile connections. Yet, for many, smartphones remain out of reach due to high upfront costs.
Now, telcos and lenders are using device lock technology, restricting access to the phone when payments are missed, thereby making smartphone financing sustainable and secure, even in low-income, high-risk segments.
This approach, combined with the popular Lipa Mdogo Mdogo (“pay little by little”) model, is unlocking new digital possibilities for millions of Kenyans and a major growth opportunity for telcos, fintechs, and lenders.
Let’s explore what makes the Lipa Mdogo Mdogo model so effective and how it’s reshaping smartphone access and financial inclusion in Kenya.
How does Lipa Mdogo Mdogo work?
The Lipa Mdogo Mdogo model is simple:
Small upfront cost → Daily/weekly installments
Why does Lipa Mdogo Mdogo work in Africa? Because it aligns well with income patterns in Africa, where many individuals, especially in low-income or informal sectors, earn daily or weekly wages. For this reason, Lipa Mdogo Mdogo even uses the PayGo (Pay As You Go) and BNPL (Buy Now Pay Later) model so low-income individuals can easily gain access to smartphones.
But Lipa Mdogo Mdogo is more than a payment model; it’s a gateway to digital inclusion, economic participation, and financial access. For lenders and telcos, it offers a powerful growth engine, but only if backed by the right technology.
Telcos like Safaricom have already financed over 2 million Lipa Mdogo Mdogo phones in Kenya, driving 4G adoption and digital access to the economy.
But scaling this model comes with three key challenges:
Risk Associated with Thin-File Customers
Traditional credit scoring fails when users have no formal financial history.
High Fraud &
Churn Risk
Fake sales, SIM swaps, and device theft are common in low-income segments.
Low Repayment Discipline
First-time borrowers, especially daily wage earners, often show irregular payment behavior, risking higher defaults.
The Winning Playbook?
Leading telcos and fintechs are not relying on unreliable credit scores. Instead, they’re embedding device locking technology and behavioral nudges directly into the smartphone repayment journey.
Datacultr’s Proven Solution that Helped Telcos and Fintechs Scale
Smartphone affordability is only a part of the challenge. For lenders and telcos in Kenya, the real need is secure, scalable, and profitable smartphone loans in Kenya, especially for underserved or “new-to-credit” users.
Datacultr’s Odyssey makes this possible. Here’s how:
- Smart Device Locking: Protects the financed smartphone. If a payment is missed, access is restricted, prompting timely repayment.
- Persistent Engagement: Delivers flash messages, reminders, and behavioral nudges in the customer’s local language, right on the device.
- SIM-Independent Control: Lenders stay connected even when users change SIMs or numbers, ensuring continuous engagement and repayment visibility.
Together, these features do more than reduce rising delinquencies. They make it easier to recover overdue payments, even from remote or disconnected users, and unlock lending potential in the most challenging segments:
- Enable financing for “new-to-credit” customers who were previously excluded
- Reduce early-stage defaults and non-performing loans
- Build positive repayment habits that lay the foundation for financial inclusion
Datacultr: Driving Sustainable Growth & Financial Inclusion in Kenya
Datacultr’s impact is already visible: 20 million loans secured globally and $5.45 billion in loan value protected. For lenders in Kenya, this means more than security; it’s a chance to grow mobile device financing even in high-risk customer segments.
What sets Datacultr apart? Its deep understanding of on-ground realities in markets like Kenya. The platform works even when contact numbers change, and supports repayments through local apps, wallets, web, and USSD, making repayment of overdue installments as easy and familiar as possible.
Datacultr’s device locking technology is already powering this transformation, reducing risk, improving repayment behavior, and helping telcos and lenders scale mobile device financing confidently.
The opportunity is massive. But the real question is:
Will you lead the transformation, or watch others unlock this multi-billion shilling opportunity?
People Also Ask
How does Datacultr’s device financing solution work with Lipa Mdogo Mdogo?
Lipa Mdogo Mdogo lets customers pay in small daily or weekly installments, making smartphones more accessible to underserved users. With Datacultr, you can offer this model more securely, using device locking to ensure repayment and Promise to Pay to offer flexible schedules without losing control.
Why is device locking important in African markets like Kenya?
Device locking serves as a digital safeguard. It turns the smartphone into a secure asset that can be managed remotely if a loan becomes delinquent. This reduces financial risk for lenders and enables them to extend financing to broader, higher-risk populations, even in markets facing rising delinquencies.
How does smartphone financing support financial inclusion?
Smartphone financing solution by Datacultr helps underserved users own devices without upfront costs. This access opens doors to digital platforms, builds repayment behavior, and helps first-time borrowers establish a credit footprint, even after an overdue installment payment.