Safaricom has announced a new device financing model dubbed Lipa Mdogo Mdogo. The announcement was made during the company’s Full-Year Financials results press conference.

Peter Ndegwa, Safaricom CEO, noted that they were currently piloting Lipa Mdogo Mdogo. The new product would see customers purchase new smartphones on contract terms and pay a monthly fee to offset the cost of the device.

This kind of model has been widely used in Western countries, where customers get a device that is locked to a particular network and pay a fixed amount of money every month for a period of two years. Usually, the contract includes mobile data, SMS and voice bundles in the plan.

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Daily Instalments

Peter Ndegwa said that Lipa Mdogo Mdogo is in partnership with Google and Teleone and aims to offer affordable access to 4G internet to more people across the country.

“Lipa Mdogo Mdogo will help the mwananchi who earn their wages daily acquire a range of smartphone and pay in easy daily instalments for as low as KES 20 while enjoying all the benefits that comes with being digitally connected,” said Peter Ndegwa.

As you can see, Safaricom’s model goes the daily instalments route, which could mean that the devices available under the program will probably be budget smartphones.

PostPay + Device Financing

We first heard of Safaricom’s device financing model back in March. Sylvia Mulinge, Safaricom Chief Customer Officer, hinted at the product as a PostPay value addition.

“We have big surprises for our PostPay customers in the near future where we plan to offer additional destinations for international calling and also unveil a device financing model where customers can get a device as part of their PostPay plan,” she said.

With Sylvia’s previous announcement, Safaricom Lipa Mdogo Mdogo model could offer voice, SMS and data bundles as a package to the device financing model.

Currently, the product is under a pilot program and is expected to launch to the general public sometime between May and June 2020.