In a world driven by screens, the line between need and want has become paper thin.
What happens when you cannot afford a smartphone but still feel the pressure to be on TikTok, Instagram, or WhatsApp? For millions of low-income Kenyans, the answer lies in hire purchase a payment model that allows people to acquire phones, motorbikes, or even tuk-tuks by paying small daily installments.
It sounds like empowerment. It sounds like inclusion. But beneath the surface, the numbers and the consequences tell a very different story.
The Allure of Daily Payments
Companies like Watu Credit and Safaricom’s Lipa Mdogo Mdogo have perfected the art of “pay-as-you-go.” With as little as KSh 5,000 deposit, one can walk away with a brand-new phone, promising to pay a fixed daily fee until it’s fully settled.
Take the Samsung Galaxy A36, for example. In cash, it retails at around KSh 40,000. Through hire purchase, the deal looks like this:
- Deposit: KSh 15,500
- Daily installment: KSh 257 for 365 days
That math? 257 × 365 = 93,805. Add the deposit, and the total comes to 109,305 shillings nearly three times the original cash price.
At first glance, the daily rate seems manageable. “Only 257 bob a day,” many customers say. But over time, those shillings quietly pile up into an unshakable mountain of debt.
More Than Just a Phone
For many in rural Kenya, these schemes are a lifeline. Elders who previously relied on simple button phones now experience the joy of WhatsApp video calls with their children. Youth in villages use smartphones to join TikTok trends, search for jobs, or run small online hustles.
And for the boda boda sector, hire purchase was once revolutionary. Motorbike financing gave young men a path to employment and income. But as the model extended from bikes to phones, the consequences became far more personal.
Because unlike a motorbike, a smartphone holds your life your contacts, your business leads, your digital wallet, your memories. And here’s the catch: until the final shilling is paid, the phone is not really yours.
When the Payments Stop
This is where the dream becomes a nightmare.
If a customer misses payments, the device is remotely locked. No calls. No M-Pesa. No access to stored data. Suddenly, your entire digital life is frozen by a company somewhere in Nairobi.
But the damage doesn’t stop there. Defaulting on these loans can land you on the Credit Reference Bureau (CRB) blacklist. This means:
- You cannot access future loans.
- You may be disqualified from jobs that require a clean CRB certificate.
- Your financial reputation is tainted, sometimes for years.
In short: what began as a path to digital access becomes a roadblock to future opportunities.
Is It Really a Choice?
Defenders of hire purchase argue that it’s simply willing buyer, willing seller. No one is forced to buy a smartphone this way. And indeed, for some, it works they make payments diligently, enjoy their phones, and never default.
But let’s be honest: not all choices are made in freedom.
Many Gen Z Kenyans, driven by social pressure and dopamine hits from social media, feel they must own the latest smartphone, even when their income cannot sustain the cost. Others, especially low-income earners, view these daily payment schemes as the only gateway to digital inclusion.
It’s not always greed on the lender’s side. It’s also desperation on the buyer’s side.
The Hidden Cost
Peace of Mind
Debt is not just about money. It’s about stress, shame, and uncertainty.
When a phone becomes a debt trap, it robs more than finances it robs peace. Every M-Pesa message becomes a reminder of how much you still owe. Every day missed brings you closer to blacklisting.
And because the repayment price is 3–4 times the actual cost, many ask: is this truly inclusion, or exploitation disguised as convenience?
Do Kenyans Understand the Math?
One of the biggest gaps fueling this trend is financial literacy. Many customers don’t calculate the total repayment cost before signing. They only see the daily figure: “257 shillings.” It feels small, like buying a soda.
But over 12 months, that soda-sized payment becomes a financial boulder.
This raises urgent questions:
- Are Kenyans equipped with enough financial education to make informed choices?
- Should government regulators enforce transparent disclosure of true costs before customers sign?
- And most importantly: are there better models of affordable digital access that don’t sink people into debt?
The Bigger Picture
The smartphone hire purchase boom is a mirror of Kenya’s economic paradox. On one hand, it drives digital inclusion connecting millions to opportunities online. On the other hand, it entrenches debt cycles among the poor.
Like mobile loans and digital credit apps, it reveals a deeper truth: access without education is exploitation.
Conclusion
Digital Access Should Not Become Digital Debt
Smartphones are no longer luxuries; they are essential tools for work, learning, and connection. But the way they are being financed raises hard questions about sustainability and fairness.
Until consumer protection laws tighten and financial literacy spreads, millions of Kenyans will continue paying the “poverty premium” where the poor pay more for the same product than the rich.
The real cost of a smartphone is not just shillings. It is freedom, peace of mind, and future opportunities. And no phone should come at that price.
