Safaricom kicks off Lipa Mdogo Mdogo smartphone loan program


Safaricom is set to kick of its KES 20 ($0.20) a day smartphone loan program dubbed Lipa Mdogo Mdogo in a bid to increase its data revenues.
The Kenyan telco giant has partnered with Google to offer 1 million affordable smartphones for sale in the program.

The firm has faced slow growth in the frequency of mobile calls, primarily due to saturation. Safaricom is having better luck with its mobile money platform, M-Pesa and mobile data.

In a bid to promote cashless transactions, Safaricom waived fees for mobile money transfers under KES 1000 (US$ 10) via its M-Pesa platform, a move that has since cost the company billions in revenue monthly as the pandemic rages on. The firm is looking for ways to mitigate this loss. Increased mobile usage would most certainly boost revenues from the mobile data.

In an opinion piece in a local daily, Safaricom CEO Peter Ndegwa said, “Cost of devices should no longer be an impediment. We are launching an innovative device financing plan dubbed dubbed Lipa Mdogo Mdogo that will give customers still using feature phones an opportunity to own a 4G- enabled device by paying only Sh20 a day.”

The KES 20 is the base amount repayable daily; buyers who go for more expensive devices will have to repay at a higher daily rate. Safaricom’s plan is to eventually convert 4 million 2G and 3G phones to 4G.

The CEO added, “Democratising data implies facilitating its universal access. It requires continually working towards bridging the digital divide.”

By March 2020, Safaricom’s mobile data revenues had gone up by 12% to KES 40.7B (US$ 373 million).

“Mama Mbogas are also using 4G enabled devices to send photos and videos of their produce to customers, taking orders online and delivering using boda-boda riders,” said Mr Ndegwa, “It is an innovative way of allowing customers to get a device that they would otherwise not be able to afford. If you have an app, you can’t use it on a 2G phone.”

Speaking about the program, Director, Android and Platforms Partnerships for Africa, Mariama Abdullahi said, “Android’s goal has always been to bring the power of computing to everyone. Access to the opportunities the internet offers is critical for any nations’ economic growth and social inclusion. Majority of Kenyans and Africans at large access the internet via mobile broadband.”

Abdullahi added, “We believe that this collaboration with Safaricom will bring more Kenyans access and the means to partake in the opportunities that exist online.”

The on-going pandemic has seen people locked into their own houses; with reduced movement, the demand for home internet and mobile data has sky rocketed. Most students are using e-learning services, while most white-collar workers also need to work from home.

Entertainment platforms such as Netflix and Showmax account for an increasingly large percentage of data usage, at 35% of the total.

Earlier this year Safaricom announced that it would be launching Kenya’s first 5G internet service. This will undoubtedly see the firm’s revenues grow even more as was the case after the launch of its 4G network in 2015.

In addition to this, Safaricom is planning to provide 4G coverage to the rest of the country by the end of 2020.