Techies are not happy with the partnership between Mkopa and Samsung. Techweez has written an article advising her readers to “not board” but “say no” to the partnership. Tech-ish also had to advise her readers to save their money “and wait to afford a phone at once”. The big reason why techies are against the Mkopa Samsung Partnership for Samsung Galaxy A10s low budget smartphones is value for money.
The Mkopa Samsung Partnership goes like this:
- A customer needs to pay a one time downpayment of Kshs 3,500. This is close to the 25% rate being paid as down payment by those who buy phones in contract in places such as Europe and the US.
- Pay a daily Kshs 60 rate for a period of 365 days. This works out to be Kshs 21,900. Add the Kshs 3,500 down payment and you arrive at Kshs 25,400 for the Samsung Galaxy A10s – a smartphone that if you are to buy in cash, will need you to chuck Kshs 13,000. Now Kshs 25,400 is close to double the retail price of the same phone. This makes me remember the days of hire purchase. In early 2004, my father bought an Exide Battery for Kshs 50,000 on hire purchase. If he was to buy the same battery in cash, he could have paid Kshs 14,000. Lucky for him he died later that year after paying only kshs 9,000 for the battery.
- Customers to make payments via MPESA, get the smartphone after making the down payment, but in case of default, Samsung through Samsung Knox will lock the device in a similar fashion Mkopa locks their Solar panels when customers are unable to make their shs 40 daily payments.
Value for money doesn’t end with the reasoning that the hire purchase model makes the Samsung Galaxy A10s twice as expensive, but also due to the fact that by the end of the payment period, the retail price for the device shall have dropped significantly. Also, the fact that the device shall be a one SIM, still requires one to spend on airtime and bundles separately, and the requirement for continuing to make payments in case the device is lost, make it even more absurd to opt into the plan.
Despite the well listed drawbacks, Kenyans are still going to find the hire purchase model by Mkopa and Samsung very useful, and this goes back to the culture of “kidogo economy”. Kidogo economy was a term coined by Bob Collymore when he wondered how a Kenyan would rather buy toothpaste one squeeze at a time instead of buying the whole tube. This peculiar purchasing habit by Kenyans made Safaricom introduce scratch cards as small as bamba 10.
When you therefore tell a Kenyan that they will pay for a shs 13,000 smartphone for Kshs 60 day, the Kenyan will not bother to run the math that at the end of the year, he shall have coughed close to Shs 26,000 – that if he were to save the shs 60, it would take him somewhere close to six months and be able to afford the device for its retail price.
The other reasons Kenyans will rush to the Mkopa Samsung Partnership is the same reason they rushed to Fuliza, an instant loan offer by Safaricom that charges interests at the rate of 300% per month, or 3600% per annum, payable daily. These outrageous interest rates did not deter Kenyans from making Fuliza one of the most popular instant loans in the country. In November last year, Safaricom reported that Kenyans had borrowed some shs 140 billion through Fuliza in a span of 9 months.