Canalys says that device financing is transforming smartphone ownership in Africa, helping to bridge the affordability gap and promote digital inclusion.
According to the global technology market analyst firm, models like “Buy Now Pay Later” (BNPL) and “Pay As You Go” (PAYG) are broadening smartphone ownership and enhancing digital inclusion across the continent.
In Q3 2024, the African smartphone market grew by 3% year on year, reaching 18.4 million units. However in its Q3 2024 report, Canalys states that feature phones still accounted for 55% of Africa’s total mobile phone market due to affordability challenges. “Smartphones, however, are vital for Africa’s development, serving as gateways to financial inclusion, education, healthcare and entrepreneurship,” Canalys says.
In Nigeria, providers such as Easybuy, Slot Nigeria, Jumia Flex, and CDCare offer flexible financing options, allowing consumers to own smartphones by paying an initial deposit followed by the remaining balance over a set timeframe.
How Device Financing works
Device financing allows individuals to acquire smartphones through installment plans or loans, spreading the cost over time. This approach makes devices more accessible to those who may not have the upfront funds. In sub-Saharan Africa, where a significant portion of the population is unbanked or underbanked, only 49% of adults have a bank account, according to the World Bank. Though this figure has doubled since 2011, it is still behind the global average of 76%.
These programmes often require an initial deposit of 15% to 30%, followed by daily or monthly payments over six to twelve months. In East Africa, financing plans may extend up to 360 days, while in West Africa, they typically last up to six months, Canalys says. As a safeguard, device-locking technology is commonly employed to ensure payment compliance, rendering the phone inoperable if payments are missed.
In Nigeria, providers such as Easybuy, Slot Nigeria, Jumia Flex, and CDCare offer flexible financing options, allowing consumers to own smartphones by paying an initial deposit followed by the remaining balance over a set timeframe.
East Africa-based M-Kopa has financed millions of smartphones since 2020, reaching over 5 million customers across its five markets in Africa. These initiatives primarily target young, low-to-middle-income earners who utilize smartphones for education, work, and connectivity.
The African smartphone market is expected to experience an annual growth rate of 6.87%, with revenue projected to reach USD 41.4 billion in 2024.
Despite the progress, challenges such as fraud, identity theft, and high rates of non-payment persist. Regulatory uncertainties and high import duties in countries like Kenya, Egypt, and Morocco further complicate the landscape. However, local manufacturing initiatives, such as M-Kopa’s smartphone assembly factory in Kenya in collaboration with HMD Global, are helping to reduce costs and boost local economies.
The African smartphone market presents significant growth opportunities. Canalys projects a modest Compound Annual Growth Rate (CAGR) of 1.2% from 2025 to 2028, with 4G devices accounting for 55% of shipments.
“For device and service providers, device financing will serve as a gateway to establishing differentiated competitiveness,” Canalys says. “Vendors and channel partners that can collaborate to offer competitive financing solutions, build the early mover advantage and effectively manage risks such as financial policies, currency fluctuations and default risks will seize opportunities in this emerging market.”
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