Smartphones are some of the items that appeal to the young generation more than anything else. Nowadays smartphone makers seem to be releasing new phones so often with the latest iPhone 8, iPhone X and Samsung Galaxy S9 models already available, super-keen smartphone users have a big decision about upgrading. For Chinese phone makers like Tecno, Infinix, Gionee, Itel, etc, their rate of launching new devices are so fast that loyal customers are often left perplex or confused if to buy now or wait for the next release. Now with this high influx of smartphones into the market and the temptation for users to upgrade to a newer version coupled with the high prices of these devices, one would think that service providers like MTN, GLO, Ntel, Airtel etc in collaboration with phone companies will come up with a plan to enable Nigerians buy high end devices and spread the payment over a period of one year like it is done in advanced countries. For example, the new iPhone X 256GB costs $1829, that’s about N700,000 in Nigeria while the 64GB version is about N370,000 on Konga or Jumia. Now that amount will put a big hole in the pocket of the average Nigerian. Companies like Verizon and Vodacom sell this devices at 12-Month plan and earn more money
Selling smartphones on a contract to Nigerians will enable middle class youths afford high end devices without breaking the bank at the same time, the companies will make more money at the end of the plan, Looks like a win-win situation for everyone right ? So why is it no operational in Nigeria ? These are some of the obstacles.
1. No accurate database system:
Despite efforts of FG to collate accurate database of Nigerians through relevant agencies, they have not succeeded in that regard. Who will give out a product on credit to someone he doesn’t have an accurate information about ? Information like criminal records, personal data, average income, etc of every Nigerian including new born babies of every Nigerian must be known for an effective credit system to work.
2. Lack of sincerity and trust:
Sadly this unfortunate reason is real. It is the same reason that has made major shopping sites in the world refuse to sell to Nigeria even though they’re ready to pay cash. Nobody is ever going to do credit transaction in such an atmosphere.
3. A big class divide:
No matter how expensive a smartphone is, there are always Nigerians ready to pay instantly for it without blinking an eye. There’s a big gap between the rich and the middle class and also a big fat gap between the middle class and the poor. Which seller wants to look at a person wanting to buy credit when a big boy is ready to pay cash.
4. Lack of relationship with banks:
Only about 5% of customers actually have good relationship with their banks. All they do is go in, deposit, withdraw and complain to customer service! No relationship whatsoever, no dedicated accounts officer. Building good relationship with a bank will enable the banks to determine the creditworthiness of a person.
5. Nigerian mentality:
Because we are so used to our “cash and carry” mentality, a lot of people will not really welcome the idea of purchasing gadgets on contract. Some may feel the gadgets are substandard or there’s a loophole somehow in the transaction. We’re so used to saving before buying that a new arrangement will seem strange. Those days in the university, our VC came up with a plan to enable students buy new laptops from the school on contract and pay over a period of one year. Only very few students patronized it and the management eventually scrapped the arrangement.
6. Limited to one network:
For those who buy phones on foreign sites. Sometimes, we see phones that are “locked” to a single network like Verizon, T-Mobile AT&T etc. Those are phones bought on contract with the network providers and Nigerians are so used to swapping SIM cards that if a network like GLO comes out with a plan to enable Nigerians buy an iPhone X (locked on GLO network) and pay in 12 Months, most people will run away. Do you know more reasons why buying gadgets on contracts won’t work in Nigeria, tell us in the comment section.