Kenyan asset financing startup Watu has reported a record net profit of KES 4.8 billion ($37 million) for the financial year ending December 2025, underscoring the rapid growth of smartphone financing across East Africa. The company’s strong performance marks one of the most significant profitability milestones for a fintech operating in the region’s buy-now-pay-later (BNPL) sector.
Founded to provide affordable financing for motorcycles and other productive assets, Watu has increasingly shifted its focus toward smartphone lending, a segment that has experienced explosive demand in Kenya and neighboring markets. Rising smartphone adoption, coupled with limited access to traditional credit, has created a lucrative opportunity for fintech lenders offering installment-based payment models.
The Nairobi-based company recorded a dramatic increase in earnings compared to previous years, driven largely by the growing number of consumers financing smartphones through flexible repayment plans. Reports indicate that smartphone financing has now overtaken motorcycle loans as Watu’s fastest-growing business line. Watu’s success reflects broader trends shaping Africa’s digital economy. Millions of Africans remain excluded from formal banking systems, making asset financing platforms increasingly important for accessing essential technology. Smartphones, in particular, have become critical tools for communication, mobile banking, online education, and digital commerce.
The company has capitalized on this demand by partnering with mobile phone retailers and telecom operators to offer customers devices with small upfront deposits and manageable installment payments. This model has attracted lower-income consumers who would otherwise struggle to purchase smartphones outright.
Analysts say the company’s profitability demonstrates that fintech firms in Africa can build sustainable businesses despite challenging economic conditions. High inflation, currency depreciation, and rising living costs have pressured many startups across the continent. However, Watu’s scale and expanding customer base appear to have insulated it from some of these headwinds.
The strong results also come amid growing investor interest in Africa’s consumer credit market. As smartphone penetration deepens across the continent, lenders are increasingly viewing device financing as a gateway to broader financial services, including insurance, savings, and digital loans.
Watu is reportedly targeting revenues of up to KES 44 billion ($340 million) as it continues expanding its smartphone financing operations across Africa.
The company’s record profit signals a major shift in African fintech, where access to digital devices is becoming both a business opportunity and a driver of financial inclusion.
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