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Firm taps into financing to get phones in users’ hands

By , People Daily Digital
Thursday, October 21st, 2021 00:00 | 3 mins read
Phoebe Irungu is the head of credit and chief of staff at Follow Me Talk, a telecommunications retailer. Photo/PD/JOHN OCHIENG

Many people have had a rough time repaying loans, especially at a difficult economic time as this.

Often, the relationship between creditors and their clients gets ruined after individuals default on their repayment and their names end up in the records of the Credit Reference Bureau, impacting their credit worthiness negatively.

A report in February this year indicated that 14 million Kenyans have been listed with the dreaded bureau, meaning they have been blacklisted and have limited access to credit facilities.

Against this context, Phoebe Wanjiru Irungu and her team saw a need to come up with a solution that would in turn build a good relationship between the parties and that is how Follow Me Talk came to existence in 2017.

“Follow Me Talk is a phone financing company that allows a client to buy a phone on hire purchase by making a deposit of 50 per cent of the cost of the phone and the balance is paid on monthly instalments within a period of five months interest free.

The phone comes with a six months’ insurance where the device is covered against theft and damage until one completes paying the loan,” she says.

Phoebe, who has a background in finance having graduated with a Bachelor of Commerce in Management Science at Egerton University in 2015, is the head of credit and chief of staff at the company.

For her, keeping a good relationship with the clients is the key to business success. 

“Every month, when a client pays the instalments on time (before the fifth), they are supplied with a food package as a gift.

It comes with sugar, chicken, maize flour, wheat flour and cooking oil. This has cemented our relationship with them.

If a client comes back for the second time or more, we give them discounts,” she says. 

With most financing companies depending on interests as their main source of revenue, Follow Me Talk’s case is different.

They use a model where the device is priced as normal, but the cost is divided into installments in such a way that a customer is able to pay based on their credit analysis.

This was to keep clients from defaulting on their repayment due to the heavy interest charges. 

“We also wanted to accommodate everyone in our policies including Muslims whose law, the Sharia, is against charging of interest. This has attracted them as our clients,” she says. 

Cab drivers using digital taxis appshave also become their steadfast clients after getting attracted to the insurance cover that Follow Me Talk offers. 

Through the company, they get compensated with insurance or smoothly pay for their loans in case they want to buy a new phone.

The insurance also carters for phone repairs in case the phone gets hardwaredamage such as screen breakage.

“Access to credit is a challenge in Africa due to the long application procedures and requirements.

Here, we will only need your MPesa statement, Identity card,  CRB records and a next of kin details,” she says.

Phoebe says when Follow Me Talk was starting out, they were charging 25 per cent on deposit, but this led most people to defaulting on their repayment.

They had to raise it to 50 per cent to make people more committed to completing the payment.

They also came up with the idea of locking up the device when one fails to pay for the installments on time.

She says a competitive market is a contributor to success in business as it encourages companies to come up with new ideas to stand out as well as open up more options to clients.

Currently, the company has a total of 12 employees and is still growing. 

With international calls known to be costly, they have also come with an affordable Follow Me Talk app meant for business people who make international calls from Kenya at just Sh400 charges per month, using airtime. 

“The idea is for business people that want to communicate with other people abroad.

Here, one owna a United Kingdom or United States number. When travelling overseas, they  will not have to look for a sim card or a new phone with this app,” she says.

Phoebe regards the Kenyan market as the best place to do business, especially a phone financing company as it is similar to that of the UK. 

“One of the things Kenya has that is different from the other African countries is that you can check someone’s credit history.

Kenya also has a high disposable income and a good foreign exchange rate,” she says.

However, she points out collections of credits is the biggest challenge in the business. Lack of awareess on credit is also a hurdle. 

“Most people didn’t understand what credit stands for until we partnered with Metropol, which provides CRB Services to providers of goods and services on credit in Kenya, to help customers improve their access to finance and increase the credit providers’ capacity to lend profitably to more customers,” she says.

About the company’s future, Phoebe says, they would like to offer more services to their clients. 

“Women have become our loyal clients more than men, so we have started offering them washing machines to help them minimise the workload.

We also want to offer our services to the whole country, especially in rural areas,” she says in conclusion.