Kenya’s smartphone financing sector faces significant challenges due to the rise of “phone flashing,” an illegal practice allowing users to bypass security measures on financed devices.
This unlawful activity erodes consumer trust, leads to over Sh100 million in financial losses, and disrupts the industry. Entry-level smartphones, particularly the Samsung A04 and A14 series, have been heavily targeted, reducing sales and job losses. The issue is made worse with the availability of online tutorials and services encouraging these hacks.
Despite countermeasures like advanced security technologies, enhanced Know Your Customer (KYC) processes, and shifts to less vulnerable low-cost phones, the problem persists.
Industry leaders are now calling for stronger legal enforcement and consumer education to protect the ecosystem. Despite the challenges, the sector is committed to enhancing collaboration and safeguarding Kenya’s digital economy.
Watu Africa, via its Watu Simu subsidiary, has sold over 1 million devices in Kenya and 1.5 million across sub-Saharan Africa. It uses Samsung Mobile’s Knox Guard technology to provide affordable smartphone financing that promotes digital inclusion and economic productivity.
“Our partnership with Samsung came about from a security perspective. As an asset financier, issuing an asset that is not well secured and can be breached, is as good as giving these assets for free and one can never be sustainable that way,” said Erick Massawe, Watu Africa’s Country Manager for Kenya.
“We did our research and realized that the one company with robust security is Samsung and then we approached them, forged a partnership and now we are here,” he continued.
M-KOPA on the other hand aims to produce and sell 10 million affordable smartphones in Kenya by 2027. It has already reached 5 million customers across Africa and created over 16,000 jobs, recently launching the M-KOPA X20 smartphone with integrated financial services.
M-KOPA’s 2024 Impact Report highlighted the company’s significant contributions to Kenya’s economy and digital inclusion efforts – producing over 1.5 million smartphones locally, reaching over 3 million customers in the country, and injecting Sh17.2 billion in taxes since its inception.
“M-KOPA Kenya is proud to be a driving force in expanding economic opportunities for millions of Kenyans and making a significant contribution to the economy of the country,” said Martin Kingori, GM M-KOPA Kenya.
“We are a purpose-driven company whose mission is not only to connect people digitally but to ensure that financial services are accessible and affordable, paving the way for financial empowerment and long-term economic growth.”
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