At a busy roadside café in Nairobi’s Eastleigh district recently, traders gathered in small clusters, voices rising in a mix of anger and disbelief.

Their issue? The phones they had bought on credit had been switched off despite regular payments — leaving them cut off from work and vital services.

A similar situation unfolded in the city's Central Business District on December 14, when hundreds of small-scale traders were left stranded after their Lipa Mdogo Mdogo mobile phones suddenly stopped working despite making daily payments through the on-phone application. This triggered protests outside Onfon Mobile offices, with customers demanding explanations and refunds.

Buy now pay later schemes have become a lifeline for many low and middle-income Kenyans seeking smartphones that were previously unaffordable.

Small weekly or daily instalments provide access to the digital economy: money transfers, jobs, education, and communication.

But for a growing number of buyers, the experience has become increasingly frustrating. Tom Otieno, one customer, said his phone would lock at exactly 8.49 pm each day despite making weekly payments.

"I bought a phone for Sh25,000 on hire purchase. I have been paying Sh640 every week for the past year on top of a Sh6,700 deposit. I still have another year to pay about Sh9,500. This brings the total cost to Sh32,500, more than Sh7,000 above the price. Despite this, I experience frequent interruptions. This is unfair," he said.

Jane Wangari, who bought her mother a phone through the scheme, said that when the device locks at 7 pm, her mother remains offline until the following day at 9 am to reach customer care, which then unlocks it temporarily. "Onfon needs to address this issue. I have paid nearly 70 per cent of the total cost," she said.

The protests prompted police intervention, with Nairobi area commander George Sedah confirming that at least 120 reports involving the phone agent had been recorded at police stations across the city. He told the Star that investigations were being conducted by the Directorate of Criminal Investigations.

In a statement, the phone firm said a “technical issue” linked to system upgrades caused the unintended lockouts, disrupting service for some customers.

Onfon group managing director Andrew Mbuya said the disruption was linked to an undersea cable cut. "The incident affected certain services, including the phone unlocking process," he said.

Complaints have been lodged against several BNPL agents over the past year, with some customers choosing to stop payments after unresolved disputes.

Across Kenya, BNPL providers have financed millions of smartphones.

Customers typically pay a deposit, then settle the balance through daily or weekly mobile money payments — often via Safaricom’s M-Pesa platform.

However, the financing model allows for remote device locking. If a payment is missed or not correctly recorded, software can temporarily disable the phone until the account is reconciled.

Critics argue that some providers act too quickly and provide limited clarity on penalties or dispute resolution.

In one widely shared online post, a customer said his M-Kopa phone was flagged for lockout by 8 am despite having paid the previous day, citing a discrepancy between M-Pesa records and the credited amount.

Another social media post from March 2025 claimed a smartphone became unusable weeks after payments were completed.

The post alleged the company later contacted the customer with offers of additional loans, raising concerns among some users about repeat borrowing.

BNPL schemes often advertise low instalments — sometimes as little as Sh30 or Sh50 a day — but total payments may exceed retail prices once mobile money charges and other fees apply. Some buyers end up paying significantly more than the device’s market value.

Despite these concerns, usage has increased. The 2024 FinAccess Household Survey shows that users of Lipa Pole Pole and similar schemes nearly tripled within three years. Hire purchase accounts rose from 579,242 in 2021 to over 1.7 million in 2024.

This growth has coincided with rising smartphone adoption. Data from the Communications Authority of Kenya shows smartphone penetration reached 83.5 per cent by June 2025, expanding internet access and data use nationwide.

Even so, consumer advocates say the cost structures can disadvantage buyers without access to conventional credit.

For traders like Esther Muthoni, a vegetable vendor at Zambezi market in Kiambu, the impact goes beyond finances.

“Without my phone, I cannot process mobile money or reach customers. I pay every week, but sometimes the system flags me as late because a small amount fails to process,” she said.

Similar concerns have been raised by traders across the informal economy.

Industry players maintain that the model plays a positive role.

Erick Massawe, country manager at Watu Credit, said BNPL expands access to essential technology and supports credit building.

“Access to affordable smartphones is no longer a luxury but a necessity,” he said in a previous interview with the Star.

He cited internal data indicating that programmes such as Watu Simu have financed over 1.4 million devices, enabling users to access digital services and, in some cases, grow income.

“For first-time smartphone users in informal settlements or rural towns, saving upfront can take years. BNPL offers a practical entry point into online learning, gig work, and cashless trade,” Massawe said.

He added that poor practices by some operators could harm the sector’s reputation, noting that regulation would help address gaps.

Consumer rights groups, however, continue to caution against risks such as high cumulative costs masked by small instalments.

They say device lockouts over minor payment issues can disrupt livelihoods. The Consumer Federation of Kenya told the Star that BNPL users remain vulnerable to exploitation.

The group also cited limited regulatory oversight, noting that many consumers do not fully understand contract terms or have access to effective dispute resolution mechanisms.

Kelvin Mutio, a boda-boda rider, said daily repayment demands strain household budgets.

“This cost competes with food, shelter, and fuel. Companies offering these services should be regulated to protect customers,” he said.

Parliament’s Finance Committee is examining whether BNPL providers, including telco-linked credit services, comply with lending laws and consumer protection standards.

While BNPL has expanded digital access, its rapid growth has highlighted weaknesses in transparency and safeguards.

As Kenya’s digital economy expands, policymakers and industry leaders face the challenge of balancing consumer protection with affordable access to technology.

For now, millions relying on BNPL continue navigating the fine line between opportunity and obligation — one weekly payment at a time.