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Credit financing boosting smartphone access

Peter 4th Dec, 2024 Financial Services Business Edge Reporter
Credit financing boosting smartphone access

Asset financing enables one to get a high-quality mobile phone without having to pay with cash.


As Uganda accelerates efforts towards digital integration, device financing is emerging as a critical solution to bridge the digital divide and empower more individuals and businesses to participate in the connected economy.

While mobile phones usage has surged in recent years, smartphone penetration has remained low, primarily due to high costs.

High quality smartphones, which typically range from UGX400,000 to UGX1.2 million remain out of reach for many Ugandans, particularly those in rural areas. This affordability gap has limited access to critical digital services, including mobile banking, e-commerce, online education, and telemedicine.

  • To address this challenge, several asset financing companies are leveraging asset financing solutions that allow customers to purchase smartphones on credit.

This ‘Buy Now, Pay Later’ model, which involves a down payment and spreading the remaining balance over several months, is revolutionizing access to smartphones. Payments can be conveniently made via mobile money platforms, making the process seamless for customers.

Armands Supstiks, the deputy Country Director for Watu Uganda, says that asset financing offers a flexible and accessible way for Ugandans to acquire smartphones. He said the devices are offered at low-interest financing options, making quality devices affordable even for low-income earners.

  • "For small business owners, smartphones are more than just communication tools; they are essential for conducting online transactions and using business support apps that streamline operations. Our goal is to ease the upfront cost burden and make smartphones accessible to those who need them most," Supstiks said.

He also pointed out that as the Ugandan government prioritizes digital inclusion, Watu is aligning its policies to boost smartphone penetration, enabling more Ugandans to engage in the digital economy. This, in turn, is creating new opportunities for growth and innovation.

Supstiks reiterated the pivotal role of asset financing in equipping Ugandans with the tools they need to thrive in a digital economy.

“By increasing smartphone penetration and investing in internet infrastructure, Uganda is steadily moving toward becoming a fully connected nation. At Watu, we are proud to be part of this journey, offering affordable solutions that empower individuals and businesses,” he said.

Though slightly more expensive overall, acquiring a phone on credit can have several benefits. One of the main benefits is that you can get the phone immediately, even if you don't have the full amount to pay for it upfront.

  • Rather than buying a cheap but poor quality phone with cash, you can get the latest smartphone model without having to pay the full price upfront. This can be particularly useful if you need a new phone urgently but don't have the necessary funds available.
  • Additionally, buying a phone on credit allows you to spread the cost over a period of time. This can make it more manageable to pay for, especially for high-end smartphones that can be quite expensive. If managed responsibly, buying a phone on credit can help build or improve your credit score. Making regular payments on time shows lenders that you can manage credit effectively.

For Watu, the loan period for phones is 52 weeks (one year) and payments are made on a weekly basis. However, despite these benefits, many potential customers remain unaware of financing programs that could make high quality and long-lasting smartphones more affordable.

Nyombi Thembo, the Uganda Communications Commission Executive Director, said low smartphone penetration needs to be dealt with as it is an obstacle to realizing the country's digital transformation goals.

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