Kenya has emerged as a digital leader in the region, according to the 2023 Eastern Africa Youth Digital Readiness Index. The study ranks Kenya at the top with a score of 26.75. The closest challenger is Rwanda at 19.85.
Access to affordable smartphones has unlocked opportunities for millions of Kenyans in various sectors of the economy, including e-commerce, education, communication, health and financial services.
In its latest report, GSMA identifies policy reforms and innovations in mobile as the key factors driving the digital transformation of the economy in Kenya.
With initiatives like the Buy Now, Pay Later (BNPL) financing model, millions of Kenyans now have smartphones.
This model is built on trust—trust that consumers will meet their credit obligations over time, usually up to a year. It has allowed Kenyans who could not previously afford smartphones to acquire devices that connect them to the digital economy.
From small-scale traders using social media to connect with their customers to students accessing online learning resources, BNPL has delivered on its promise of digital inclusion.
However, this promise is marred by the growing threat of phone flashing—an illegal practice where fraudsters bypass software locks on financed phones.
This poses a significant challenge to the sustainability of the BNPL model and, consequently, to digital inclusion. If left unchecked, this challenge could undo the gains we have made as a country in democratising access to technology.
To illustrate the extent of this menace, between July and September 2023, the BNPL industry lost over Sh100 million in value of mobile devices that were flashed, with customers defaulting on their payments without facing any repercussions. We consider such devices effectively stolen and bad debt in our books.
But the impact of phone flashing extends far beyond financiers. It also affects the phone retailers who depend on partnerships with BNPL providers to sell their devices. As flashing incidents continue, financiers are avoiding financing these phones, limiting consumer options.
It should not be lost on us that their activities are not just illegal—they are a form of cybercrime that threatens the integrity of our digital ecosystem. The police must intensify their efforts to crack down on phone-flashing syndicates.
Even more concerning is the industry’s shift away from financing premium mobile devices, which are more appealing to hackers and result in higher losses when flashed.
While this may seem like a practical solution, it risks stalling innovation and reducing access to higher-quality smartphones that better serve consumers’ needs.
This is counterproductive to a country that is seeking to sustain its economic momentum by focusing on digitalisation as a key driver of economic growth, government revenue, socio-economic development, and a pathway to shared prosperity.
Essentially, phone flashing impacts the entire mobile ecosystem, with the customers bearing the heaviest brunt. The action of a few bad actors is forcing the lenders to tighten the lending criteria; ultimately, this rolls back the progress Kenya has made in fostering digital inclusion, threatening to leave millions of people unable to afford the single most important tool they need to thrive in a digital world.
What makes phone flashing particularly alarming is how openly it is being advertised. A quick search on social media platforms, especially on TikTok, reveals numerous accounts promoting phone-flashing services in Kenya.
These hackers are working overtime; not only are they using sophisticated techniques to bypass the security measures we continue to implement, but they have also created step-by-step tutorial videos on phone flashing.
