Equity Bank has announced the launch of a loan product meant for Equitel customers to acquire smartphones. The Loans for Smartphones promotion will require the Equitel customers to purchase smartphones from Samsung, Alcatel and a few other brands and pay back the loan within one to 12 months.
As opposed to Safaricom that offer smartphone loans under a “hire purchase” model, Equity Bank Loans for smartphones is like a normal loan where customers do not have to provide any down payment, but pay back the loans only on installments on a daily, weekly, monthly or otherwise until the loan is fully repaid with interests. We have since been informed that the loans will be offered under the Equitel Mobile Money Loans structure at the prevailing market rates.
The phones that are being offered under the Loans for Smartphones promotions are available in some 49 Equity Bank branches countrywide, but Equitel customers can walk to the Equity Bank branch near them and order for any of the phones, and Equity Bank will arrange for the phone to be delivered to the branch within 24 hours. The phones on offer are all dual SIM card phones priced between Kshs 4000 to Kshs 99,000. According the the press statement, this offer is valid as long as stocks last.
The Equity Bank Loans for Smartphones promotion seem to be a genius move by Equity Bank to further popularize Equitel among Equity Bank customers. Out of about 10 million Equity Bank customers, latest statistics from Communications Authority of Kenya indicate that Equitel has roughly 1.6 million subscribers. In their end of year financial statement published in May 2016, Equity Bank indicated that the Equitel customers had surpassed the 1.8 million mark. The Communications Authority report showed that between January and March 2016, the number of transactions processed through Equitel stood at 44.7 million, up from 42.7 million. The Equity Bank Loans for Smartphones is meant to push these figures upwards, but the push might not be significant.
The reason why Equity Bank Loans for smartphones may not have a significant impact is the decision by Equity Bank to partner with a few OEMs specifically Samsung and Alcatel. The smartphone market in Kenya, although dominated by Samsung, has been slowly shifting to Tecno, Injoo, Wiko, Infinix and other emerging smartphone brands mainly sold through Jumia.
Jumia Kenya has been able to push the emerging smartphone brands in Kenya due to its ability to offer outrageous discounts on certain smartphones. For example currently Jumia Kenya is selling Infinix Hot Dragon for Kshs 11,699 yet a Samsung smartphone with similar specs would sell for over Kshs 25,000. Further, Jumia Kenya is the leading online smartphone retailer with over 45% of all items sold in the platform being smartphones. If Equity Bank were to partner with Jumia therefore, many Kenyans would find immediate value addition on both Equity Bank and Jumia Kenya products.
Partnering with Jumia Kenya would offer Equity Bank the opportunity to offer a wide range of smartphones under the “Loans for Smartphones” promotion, and at the same time encourage as many as possible Equity Bank customers not only to acquire affordable smartphones but also register for the Equitel services. Currently only 18% of Equity Bank customers have registered for the Equitel services.
The partnership with Equity Bank would equally benefit Jumia Kenya. Although phones in Jumia Kenya are quite affordable, there are still a big number of Kenyans who cannot afford to cough Kshs 4,000 and above one-off. If Jumia Kenya could arrange with a bank like Equity Bank for these Kenyans to pay for the phones in weekly/monthly installments, then the online e-commerce website stands a better chance to further strengthen her position in the e-commerce landscape.
Apart from not partnering with the right partner in the offer of Loans for smartphones, the fact that not everyone is welcomed to Equitel is also a great hindrance to the Loans for Smartphones product. In the course of penning down this article, I have already been asked by a non-Equity Bank customer on how she can get the “Loans for Smartphones”. I told her that the loans are being offered only to Equitel customers of which she asked how to acquire one – and after telling her that she must have an Equity Bank account first, she immediately got discouraged. The solution to this problem was already recommended in the article Equitel Services will never overtake MPESA unless marketing and distribution are restructured. Equity Bank has since responded to the article and
promised to make it easier for Kenyans to acquire their Equitel numbers.