Consumers in Uganda will now be able to buy phones and electronics, and furnish their homes faster and more conveniently following the unveiling of a new buy-now pay-later service. Known as Lipa Later, the service allows consumers to pay for goods in monthly instalments when purchasing them from retail stores and supermarkets. It is powered by the company’s vast retail network, and proprietary technology that uses data, analytics and machine learning to establish credit worthiness of consumers.
Speaking during the official launch of Lipa Later in Kampala, the firm’s Chief Executive Officer Mr. Eric Muli explained that 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. Lipa Later empowers consumers by giving them relief to be able to cover affordable instalments to own or upgrade their electronics and furnish their homes,” he said.
The service, he added, will also bring these 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 percent of Ugandans do not own a television set and over 90 percent 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. The data also shows that a sizable population uses their phone wallets to save money.
Known as consumer financing, Muli added that the Lipa Later concept has been around for a while and is strongly supported by retailers as it offers consumers financing at the point of purchase and therefore converting passive browsers into active buyers. He noted that it will boost their sales and grow their businesses while also raising customer loyalty and repeat business.
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). 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.
The service is already available in Kenya and Rwanda, where it has been highly successful since its launch in 2016 and 2021, respectively. The plans to expand to Nigeria are underway in 2021.