On a Saturday afternoon, Sola Akeke, (not real name), a security guard at a Lagos bank went to a popular smartphone store at Ikeja, to check the latest smart phones in the market. While there, he could see the latest Techno Spark 4 and is amazed by its features. He had the desire to buy but not enough money to purchase it.
Then a sales person introduces him to EasyBuy, a mobile device financing platform that gives him the choice of taking a brand-new phone home with a little down payment.
This latest development is now a reality as most tech stores across Nigeria are now giving the latest smartphones on credit through this new financial model gained broader appeal this year. Although 3C Hub, a popular smartphone store said that they started last year, others like Slot started about three-four months ago.
Stanley Magdaleye, a sales representative at 3C Hub said that they discovered that when a customer comes to the store and sees a new brand of Techo phone for N84, 000, he or she does not have the financial capacity to buy the phone yet it is desired and that prompted them to introduce the EasyBuy platform to fulfil the desire of their customers.
“Nigerians are trendy and aspirational people and want to use the latest phones. We recently devised a financial model where you can buy a phone and pay over a period of some months. We are adapting as quickly as possible to the market. In all, our watchword is integrity,” Nnamdi Ezeigbo, chief executive officer, Slot Systems said.
The EasyBuy platform was introduced by Transnet, a loan facility company, and a smart phone manufacturer, to help people buy their phones without stress. It provides POS loan to customers who want to purchase a mobile device. Clients can directly apply for a loan from the stores and payback in instalments. It only requires a minimum down payment of 20 percent. There are two loan terms which are three months with nine percent interest and six months with a six percent interest rate.
Abiola Gbemisola, research analyst at Lagos-based Chapel Hill Denham said, “Sellers have large number of phones that it ordinarily expects to have been sold, most of these phones probably are reaching their stale period (that is there are newer versions) so, the company wants to offload its phone portfolio, it sees credit sales as a means to offload their stock and increases sales (in it financial statement, it would record the credit sales in receivables).”
Gbemisola said the impact would be higher revenue and profit but lower cash flows from operating activity.
Nigeria has the largest mobile market in Africa with over 172 million mobile subscribers in 2018, accounting to a penetration rate of 87 percent of its population and represented a 6.4 percent growth increase, compared to 162 million subscribers in 2017, according to a report released by Jumia, Africa’s online retailer.
“People are not buying phones again because they are expensive. So, it is better buy a used phone if necessary or keep the one you have,” says Ayorinde Akinloye, a consumer goods analyst at Lagos-based CSL Stockbrokers said.
Akinloye further said that low demand had started since 2016 when foreign exchange crunch happened, the prices of phones nearly doubled.
The requirements to access such a loan requires a valid ID that is International passport or national ID card or driving License or voters Card, Bank Verification Number, ATM card and the person must be a regular income.
BUNMI BAILEY
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