Premium phones: How bank financing is changing smartphone purchases in Kenya

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The rising cost of premium smartphones is pushing more Kenyan consumers towards instalment payments, with retailers increasingly relying on bank-backed financing to make expensive devices more affordable.

Data from Apple authorized reseller Salute iWorld indicates that roughly 60 per cent of its smartphone sales are now financed through buy-now-pay-later (BNPL) arrangements, with credit-backed purchases doubling in the 2025/2026 financial year as upfront cash payments fall out of reach for many consumers.

Salute iWorld Business Manager Vincent Onyango attributed the surge in credit uptake to partnerships with commercial lenders that allow buyers to spread repayments over six to 12 months.

"I can say that it has grown by two-fold," Mr Onyango said during the Kenyan launch of Apple's iPhone 18 Pro and iPhone 18 Pro Max.

While the model keeps retail volumes moving, it shifts the entire burden of credit risk onto commercial banks and consumers. Under the financing structure, banks settle the full retail price upfront before the handset is released, leaving the customer to service the loan directly with the lender.

"We are cushioned in terms of default rate because we normally partner with banks. The full amount is settled to us before we release the device," Mr Onyango said.

The growing reliance on financing comes amid rising device costs, which Onyango partly attributed to challenges affecting the supply and pricing of chipsets.

For consumers, instalment plans offer a way to access expensive smartphones without having to raise the full purchase price at once. However, the arrangements also mean buyers take on repayment obligations that could stretch over a year.

The retailer is also considering extending its financing and purchasing arrangements to savings and credit cooperative organisations (Saccos).

The growing use of instalment payments comes as smartphone manufacturers compete for consumers in the premium segment, where high upfront prices can limit the number of potential buyers.