Lipa Mdogo Mdogo And Similar Services In Kenya
In Kenya,owning a smartphone used to mean saving for months or buying a second hand phone.With the technology we have today,financial services such as Lipa Mdogo Mdogo has changed that,this service allows users to pay as little as KSh 20 a day to own a new device.This shift has opened up digital access to millions of Kenyans,especially the youth,small business owners and rural communities.
This service,commonly known as Pay-as-you-go service,comes in different variants,Lipa Mdogo Mdogo being one of them,Lipa Mdogo Mdogo can be categorized as device financing,but there are other Pay-as-you-go services that are designed for other products including TVs,appliances,furniture,and even farming tools,depending on the provider.
While Pay-as-you-go (PAYG) and Buy-now-pay-later(BNPL) models offer convenience,they also come with costs,conditions and associated risks.This guide breaks down how Lipa Mdogo Mdogo and similar services work,who qualifies,and what to consider before signing up.
What Is Lipa Mdogo Mdogo?
Lipa Mdogo Mdogo is a smartphone financing service that was launched by Safaricom in partnership with Google on August 27,2021.It allows eligible M-PESA users to acquire select entry-level Android smartphone devices and pay for them in small daily installments.This service was designed to make smartphones more accessible to low-income users in Kenya.
How It Works
- Eligibility - to be eligible for Lipa Mdogo Mdogo service,you must be a Safaricom customer with a history of M-PESA usage and a basic phone.
- Device Options - this service typically offers select entry-level Android smartphones like the Neon Ray or the Nokia C-series.
- Payment Plan - this is the primary feature and essentially the core business model of Lipa Mdogo Mdogo,customers typically pay a small initial deposit (eg. KSh 500 - KSh 1,000),then daily payments of KSh 20 - 50 for up-to 9 months.
- Payment Options and Penalties - Payments are made via M-PESA,however if you miss a payment,the phone might be locked until you finally catch up.
Lipa Mdogo Mdogo is designed to promote digital inclusion,especially for users who cannot afford to pay upfront for a smartphone.
Other Similar Services In Kenya
Kenya's Pay-as-you-go and Buy-now-pay-later financing landscape has expanded beyond Safaricom.There are other notable services offering more than just device financing plans,they include:
1. M-KOPA
Originally known for it's solar kits - M-KOPA Solar,M-KOPA now offers smartphones,TVs, and appliances on pay-as-you-go plans.Users make daily and weekly payments via M-PESA,and devices are locked if payments are missed,you will often find M-KOPA plans bundled with airtime or data.
M-KOPA was founded in 2011 and commercially launched in 2012,it operates in Kenya,Uganda,Nigeria,Ghana and South Africa.To learn more about M-KOPA visit M-KOPA's official website
2. ASPIRA
ASPIRA is a fintech platform that simply partners with various retailers to offer financing for electronics,furniture,mobile phones and the likes.Customers apply online or in-store,submit ID and income documentation.Once customers are approved and receive their desired assets,they can repay monthly.Interest rates vary,and credit vetting is a prerequisite.
ASPIRA was launched in 2018 as a subsidiary of CIM Financial Services Group,a Mauritius-based company.It entered the market to offer flexible consumer financing solutions,including electronics,furniture and even travel packages,through a buy-now-pay-later(BNPL) model.To learn more about ASPIRA and the services they provide visit ASPIRA's official website
3. FlexPay
For disciplined savers and buyers,FlexPay offers an entirely different model for asset financing,this model is known as layaway-style.The idea here is that customers reserve a product (e.g., Phone,TV or Fridge),then pay in installments before eventually collecting it.
There is no interest or penalties associated with FlexPay and it is geared toward users who would like to avoid debt.FlexPay was founded in 2016 and often partners with local retailers to offer layaway-style payment plans.To learn more about them visit FlexPay's official website
4.DigiFarm
Another service offered by Safaricom,DigiFarm platform offers device and input financing for farmers.Through DigiFarm,Safaricom bundles smartphones with agribusiness support,allowing farmers to access digital tools and services on flexible terms.
DigiFarm was launched in 2017 as a mobile-based platform to support small holder farmers in Kenya.To learn more visit DigiFarm's official website
5.Retail Installment Plans
Retailers such as Jumia,Carrefour and Naivas may partner with third-party partners like ASPIRA and FlexPay or they might offer their own in-house plans for similar services.These plans often require ID verification,credit assessment and may include interests and service fees.
Before making use of this flexible payment plans,read their terms of service
How This Services Work
While each provider has its own model,most pay-as-you-go services in Kenya follow similar principals:
- Installment Payments - customers pay daily,weekly or monthly via M-PESA or bank transfer.
- Device Locking - for device financing services,if payments are missed,the device maybe locked remotely until you catch up with payments or balance is cleared.
- Credit Scoring - service providers assess eligibility based on mobile usage,repayment history or submitted documents.
- Bundled Services - this plans often comes bundled with extra services,especially for asset financing.Some plans may include airtime,data or insurance to increase value.
Pros and Cons of Device Financing
Here is a balanced look at the benefits and drawbacks of device financing.
| Pros | Cons |
|---|---|
| Affordable entry point | Higher cost over time |
| No need for a lump sum payment | Devices may be locked if unpaid |
| Builds digital inclusion | Limited and often budget phone models are available |
| Can improve credit profile | Daily payments can feel burdensome |
Comparing the Different Payment Models,PAYG,BNPL and Layaway Models
Even though Pay-As-You-Go financing model remains the most popular,the other models remain noteworthy and very relevant.Let us compare the three models to get a better understanding.
| Feature | Pay-As-You-Go(PAYG) | Buy Now,Pay Later(BNPL) | LayAway-Style Plans |
|---|---|---|---|
| Access to products | Conditional access | Immediate full access upon approval | No access until payment is complete |
| Ownership | Ownership is gradual or deferred | You own the product from day 1 | Ownership begins on payment completion |
| Payment Frequency | Daily,weekly or flexible micro-payments | Monthly or fixed installments | Flexible installments before collection |
| Credit Vetting | May use alternative scoring or mobile usage history | Often required formal credit checks | Usually no credit checks are needed |
| Default Consequence | Device maybe locked remotely or repossessed | Late fees or negative credit score impact | Items maybe forfeited or reservation cancelled |
| Common Use Cases | Smartphones,solar kits,farming tools and appliances | Electronics,furniture,travel and education | Phones,TVs,fridges and household goods |
Real World Examples Of Each Payment Model
Case Study 1 : Student In Thika,Using Pay-As-You-Go(PAYG)
A university student in Thika aged 20 used Lipa Mdogo Mdogo,Pay-as-you-go service to acquire a smartphone.A brand new Neon Ray.With daily payments of KSh 20,she can now access online classes,research tools,and WhatsApp study groups.She completed the payments in 8 months and now owns the device outright.
Case Study 2 : A Boda Boda Rider In Kisumu Using Buy Now Pay Later(BNPL)
A boda boda rider in Kisumu is using ASPIRA's Buy Now Pay Later(BNPL) payment plan to acquire a brand new motorcycle for work.After submitting his ID and income documentation,he was approved and recieved his brand new motorcycle immediately.He repaid the installments over 12 months,allowing him to increase his daily earnings while building credit history.
Case Study 3 : Layaway Fridge Purchase
A mother in Nakuru used FlexPay's layaway-style plan to buy a brand new fridge for her household.She reserved the fridge at a local retailer and made weekly payments over 3 months.Once the full amount was paid,she collected the fridge without incurring any interest or debt.
Smart Tips For Kenyan Consumers
To get the most out of financing plans:
- Compare Plans - Look at multiple providers before choosing your preferred one.
- Read The Fine Print - Understand the fees,lock policies,and repayment terms.
- Use Devices Productively - Leverage the acquired devices productively for education or business services.
- Avoid Defaulting - Missed payments can affect your credit profile or access to future services.
- Consider Layaway Options - If you have regular income,that might not be enough for making one time purchase,consider layaway plans so as to avoid debt and interests.
Conclusion
Financing plans have opened doors for millions of Kenyans,enabling access to smartphones,digital services,and online opportunities.Services like Lipa Mdogo Mdogo,MKOPA,FlexPay,and ASPIRA are reshaping how we acquire essential tools.
But access should come with awareness.Before signing up,understand the costs,conditions,and long-term implications.
This post is for educational purposes only. Terms and conditions vary by provider and may change over time. Always confirm details with the service provider before signing up for any financing plan.