Hormuud and GetPhone expand smartphone finance into four new Somali states due to high demand

Hormuud Telecom and GetPhone are expanding their smartphone financing programme through 15 additional branches across Jubaland, Southwest, Hirshabelle and Galmudug, after more than 2,500 smartphones were sold since the programme launched. Early repayment data also shows little difference so far between lower- and higher-scoring borrowers.

GetPhone has deliberately financed customers across a wide range of credit scores to test how closely those scores predict actual repayment. Preliminary analysis of nearly 1,700 contracts signed in August shows customers with credit scores under 500 have repaid 89.7% of amounts due, compared with 90.5% among customers scoring 650 or above.

An estimated 89% of customers in GetPhone’s August portfolio are buying their first smartphone, while nearly two-thirds are under 35. Average reported monthly household income is around $264, while the two phones currently available through the programme cost approximately $238 and $317 if bought outright, meaning either can cost around a month’s household income. SME traders and private-sector employees together account for nearly 60% of the portfolio, and women account for over 20%

The programme is taking place in a market where access to formal banking remains limited. In Somalia, nearly three-quarters of adults use mobile money while one in ten have bank accounts, according to IFC. With conventional credit histories unavailable for much of the population, mobile-money transactions can provide lenders with another way to assess whether someone is likely to repay.

However, those models still must decide where to draw the line. GSMA has warned that smartphone-finance eligibility criteria can exclude people with irregular incomes, including market traders whose takings vary from week to week, farmers who earn around harvest periods and people in seasonal or informal work.

The contracts signed in August are only weeks old, so the findings provide an early repayment signal rather than a measure of eventual default. GetPhone will continue tracking performance across different credit-score bands as the contracts mature. If the differences remain small over time, the longer-term data could help GetPhone refine how initial credit scores inform future lending decisions.

Ahmed Yusuf, Chairman of Hormuud Telecom, said:

“Somalia has already shown that people can build a financial life outside the traditional banking system. The next step is making sure our credit models reflect that reality.

“A trader’s income does not arrive in twelve identical payslips – one week can be quiet and the next busy. Our approach needs to make sense of how people actually earn.

“The prize here is bigger than the finance itself. For a trader, a smartphone can mean finding customers and taking payments. For a young person, it can put information and learning in their hand. The ambition now is to take that opportunity further, working with partners to reach communities that are harder to reach and harder for the financial system to see.”

Omar Abdi, CEO of Get Phone, said:

“A credit score is a prediction made before the customer starts repaying. Once repayments begin, you start to see how that person actually manages the finance. That gives us evidence we simply did not have at the point of application.

“The more we learn from real repayment behaviour, the more confidently we can shape the finance around how people actually live and earn and put more smartphones into the hands of Somali people, for the first time.”

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