Banks take on credit risk as more Kenyans buy iPhones on instalments

Apple retail partner Salute iWorld says its buy-now-pay-later (BNPL) sales doubled in the 2025/2026 financial year, reflecting growing demand for credit facilities that allow customers to spread the cost of expensive devices over several months.

The retailer estimates that approximately 60 per cent of its device purchases are now supported by financing arrangements, highlighting the growing role of consumer credit in Kenya's premium smartphone market.

Vincent Onyango, Business Manager at Salute iWorld, said the company's BNPL business recorded a two-fold increase during the last financial year, driven by partnerships with commercial banks.

"I can say that it has grown by two-fold," Onyango said during the Kenyan launch of Apple's iPhone 18 Pro and iPhone 18 Pro Max.

Under the arrangement, customers can acquire devices through financing periods of up to 12 months, with shorter repayment options of six months also available.

Salute iWorld works with KCB, Absa and Standard Chartered, which finance purchases and pay the retailer the full value of the devices before they are released to customers.

The arrangement allows the retailer to avoid directly carrying the risk of customers defaulting on their repayments, with the responsibility shifting to the financing institutions.

"We are cushioned in terms of default rate because we normally partner with banks. The full amount is settled to us before we release the device," Onyango said.

The model provides banks with an opportunity to expand consumer lending into the electronics market while enabling retailers to attract customers who may not have the financial capacity to pay for premium devices upfront.

Salute iWorld is also seeking to expand its financing options through partnerships with savings and credit cooperative organisations (Saccos).

Onyango said the retailer was in discussions with three leading groups in Kenya to develop arrangements that would allow their members to purchase selected products from participating vendors.

The expansion comes amid rising smartphone prices, which the retailer attributes partly to chipset-related challenges affecting the technology industry.

Despite the higher costs, Salute iWorld recorded a 27 per cent increase in device sales during the 2025/2026 financial year, indicating sustained demand for premium technology products.

The company operates 10 stores across the region, nine of which specialise in Apple products. Its remaining outlet, Salute Media, is a multi-brand store located at Westgate Mall in Nairobi.

The introduction of the multi-brand outlet is aimed at serving consumers looking for alternative technology brands beyond Apple's product range.

The growing reliance on instalment financing comes as manufacturers and retailers seek to maintain demand for high-end smartphones in a market where the cost of flagship devices increasingly puts them beyond the reach of cash buyers.

With bank partnerships and proposed Sacco arrangements, Salute iWorld is looking to widen access to expensive devices while allowing financial institutions to capture a growing share of the consumer electronics financing market.