By Peter Mwibanda
NAIROBI, Kenya
What began as a revolutionary idea to expand smartphone ownership in Kenya has quietly turned into a modern debt trap, leaving low-income earners stuck in cycles of repayment for devices that end up costing twice their value.
The “lipa polepole” model — Swahili for “pay slowly” — allows customers to acquire smartphones through daily or weekly installment plans, often as low as KSh20 per day.
While marketed as a tool for digital inclusion, economists and consumer rights advocates now say the practice is neither sustainable nor ethical.
“These financing models are aggressively marketed to vulnerable populations without proper consumer protection mechanisms,” said David Njuguna, a Nairobi-based economist. “In reality, what seems affordable ends up being a massive financial burden.”
According to industry data, millions of Kenyans have embraced pay-as-you-go phones sold by telcos and fintech companies.
The allure is obvious — instant access to the internet, mobile money and digital services without an upfront payment.
Buried in the fine print are interest rates and penalty fees that drive the final cost far above retail prices.
Many buyers, unaware of the full repayment structure, end up defaulting.
When they do, their phones are remotely locked, cutting them off from crucial services like M-Pesa, online work platforms and communication — further deepening financial and social exclusion.
A costly convenience
A smartphone that retails for KSh7,000 can cost a user over KSh14,000 by the end of a 12-month installment plan.
If a single payment is missed, the devices are locked — a tactic critics say borders on coercion.
“There’s a psychological cost, not just financial,” said consumer rights activist Grace Mbuthia. “People feel shame, stress, and frustration when they lose access to their phone — which in Kenya, is more than just a device. It’s a lifeline.”
Regulation lagging behind
Despite its explosive growth, the lipa polepole sector operates in a regulatory gray area.
The Communications Authority and Central Bank of Kenya have yet to impose clear consumer protection rules around mobile device financing.
“This space has outpaced regulation,” Njuguna said. “That’s why these predatory models thrive — there’s no oversight, no cap on interest, and no transparency in terms and conditions.”
Economists argue that unless regulators step in, the digital divide will widen further.
While lipa polepole was initially meant to bridge that gap, it’s now creating a new class of indebted digital consumers.
Experts are calling for urgent reforms: clear disclosure of total repayment costs, caps on interest rates, a grace period before locking devices, and financial literacy campaigns for low-income buyers.
“The goal should be empowerment, not entrapment,” Mbuthia said. “Affordable access to smartphones is essential — but not at the cost of people’s financial freedom.”
