A growing number of Kenyans are opting for lipa polepole (pay slowly) plans to acquire smartphones, a trend fueled by the increasing importance of mobile phones in communication, financial transactions, and digital inclusion. However, while these hire purchase arrangements provide accessibility, they often double the cost of the devices, raising questions about their economic viability.
Phone Ownership in Kenya: A Snapshot
According to the 2023/24 Kenya Housing Survey, 53.7% of Kenyans own mobile phones, with ownership rates higher in urban areas (64.6%) than in rural areas (48.6%). Yet, 11.3% of Kenyans rely on borrowed or shared phones, a trend more prevalent in urban centers.
The 2024 FinAccess Household Survey highlights the critical role of mobile phones in financial inclusion, with 9.9% of adults still excluded due to poverty, lack of ID, or inability to afford a phone. Rural youth make up 45.5% of this excluded group, underscoring the digital divide.
The Rise of Lipa Polepole
Lipa polepole plans, which allow buyers to acquire phones through installments, have surged in popularity. In 2021, 579,242 Kenyans used these services. By 2024, that number had tripled to 1.75 million.
These plans target low-income earners who cannot afford one-off payments for smartphones. Buyers pay an initial deposit and daily installments via digital wallets like Mpesa. However, the cost is steep, often doubling the retail price of the phone.
For example, David Ochieng, a Nairobi-based office messenger, purchased a Samsung Galaxy A12 in 2023 through a lipa polepole plan. After paying a Ksh.5,000 deposit, he made daily payments until the total cost reached Ksh.36,649—nearly double the phone’s retail price of Ksh.18,000–20,000.
Is Lipa Polepole Economical?
Economist Churchill Ogutu explains that while these plans offer a lifeline for low-income earners, they may not be the most financially sound choice.
“While lipa polepole makes phones accessible, it distorts financial habits. Buyers end up paying much more over time, which is not ideal for financial stability,” Ogutu observes.
Retailers also face risks when buyers default. To mitigate losses, they charge high-interest rates or lock devices through tracking apps. These measures ensure repayment but add to the buyer’s financial burden.
Digital Inclusion at a Cost
Kenya’s digital divide persists, especially in rural areas, where lack of affordable devices and infrastructure limits access to digital services. Smartphones have become a gateway to financial inclusion, enabling access to mobile banking, online education, and government services.
While lipa polepole plans bridge this gap, they do so at a steep price.
“Yes, more people gain access to phones and digital services, but the question remains: at what cost?” Ogutu asks. “Affordable alternatives are crucial for sustainable digital inclusion.”
Conclusion
Lipa polepole plans have undoubtedly increased smartphone ownership in Kenya, but the financial strain on buyers cannot be overlooked. As the country works toward bridging the digital divide, addressing affordability remains a key challenge to ensure inclusive and sustainable access to digital tools.
