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Kenya’s consumer credit platform enters Ugandan market

Kenya’s consumer credit platform, Lipa Later, has expanded into the Ugandan market, enabling customers to access credit to purchase products from retailers and supermarkets in monthly instalments.

Kampala, Uganda | JULIUS BUSINGE |The firm, which also has operations in Rwanda, said the new service will enable customers to purchase latest mobile phones, electronics and furniture.

Lipa Later Chief Executive Officer, Eric Muli, said the new service is designed to facilitate Ugandans to own mid to high value goods and upgrade their homes.

“We recognize that more often than not, there is a need to stretch income so that it can be used to meet a variety of pressing needs,” he said.

Muli said Lipa Later service will empower consumers by giving them relief to be able to cover affordable instalments to own or upgrade their electronics and furnish their homes.

Lipa Later is structured in a way that customers register for the service online and receive a credit limit with the amount they qualify for, pay 10% upfront fee for the product they select, and then settle the balance in affordable instalments over a 12-month period. All electronics come insured for the repayment period, according to Muli.

This service is powered by the company’s vast retail network, and proprietary technology utilising data, analytics and machine learning to determine credit worthiness of consumers.

The service, he added, will also bring goods within easier reach of more Ugandans since research had shown that there was a high latent demand for them but outright investment of the total sums was still out of many people’s capacity.

Data from the Uganda Household Survey of 2017 showed that more than 80% of Ugandans do not own a television set and over 90% do not own a computer.

At the same time, most Ugandans are self-employed, thus being excluded from the formal lending schemes that are attached to employers.

Muli noted that the service will initially be available at selected major brand and retail stores in Kampala in the first phase of the rollout. He envisaged that the service will be extended to other towns over the next two years.

Kenya, Rwanda experience

Lipa Later has so far experienced strong growth of 166% cumulative annual growth rate in Kenya and Rwanda from inception in 2016 to 2019 providing financing for electronic and furniture products to over 160,000 customers.

The company is currently backed by several investors including; Platform Capital, Musha Ventures, Majilis Investment, Lateral Capital, and Mastercard (through the Startpath program) and is said to be in advanced discussions with other strategic North American investors to accelerate its expansion.

The company’s goal is to enable payment plans for everything from a phone to a home through its partnerships with over 500 local & global brands such as Samsung, Tecno (Transsion Holdings), Sony, Huawei and Apple.

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