In Kenya, mobile payments have become increasingly popular over the years, and Safaricom, the leading mobile network provider in the country, has been at the forefront of driving this trend. Safaricom has introduced various mobile payment solutions that have transformed how Kenyans pay for goods and services. One of the most popular mobile payment solutions is Lipa Mdogo Mdogo.
What is Lipa Mdogo Mdogo?
Lipa Mdogo Mdogo is a mobile payment solution by Safaricom that allows users to make small payments in installments. The name “Lipa Mdogo Mdogo” is Swahili for “pay small small,” which is precisely what the service aims to achieve. The service targets individuals who want to purchase goods or services but cannot afford to pay the full amount upfront.
How Does Lipa Mdogo Mdogo Work?
To use Lipa Mdogo Mdogo, you first need to find a vendor who accepts payments via the service. Once you have identified a vendor, you can proceed to make your purchase and select the Lipa Mdogo Mdogo payment option. You will then be required to pay a deposit, usually 20% of the total cost of the item or service. The remaining amount is then spread over a period of up to six months, with interest charged on the outstanding balance.
How to Pay with Lipa Mdogo Mdogo
To make a payment with Lipa Mdogo Mdogo, you need to have a Safaricom line and sufficient M-PESA funds. The process of making payments is straightforward and can be done in three easy steps:
- Find a vendor who accepts Lipa Mdogo Mdogo payments.
- Select the Lipa Mdogo Mdogo payment option.
- Pay the deposit, and the remaining amount will be spread over a period of up to six months.
What Interest is Charged on Lipa Mdogo Mdogo?
Safaricom charges a 4% interest rate on the outstanding balance for Lipa Mdogo Mdogo payments. This rate is relatively low compared to other credit facilities, making the service affordable for many Kenyans. It is worth noting that failure to pay the installments on time attracts a penalty fee of 1% per month on the outstanding balance.
Benefits of Lipa Mdogo Mdogo
Lipa Mdogo Mdogo has various benefits, which include:
- Affordability – The service allows individuals to purchase goods or services that they would not have been able to afford otherwise. The ability to pay in installments makes it possible for individuals to budget and plan their finances effectively.
- Convenience – The service is easy to use, and payments can be made from anywhere, anytime, as long as one has a Safaricom line and sufficient M-PESA funds.
- Low-Interest Rate – The 4% interest rate charged on the outstanding balance is relatively low compared to other credit facilities, making the service affordable for many Kenyans.
- Builds Credit History – Lipa Mdogo Mdogo payments are reported to the Credit Reference Bureaus (CRBs), which helps individuals build their credit history. This is beneficial for those who may require credit facilities in the future.
- Boosts Business – The service helps vendors increase their sales by enabling them to sell their goods or services to a wider market. Vendors who accept Lipa Mdogo Mdogo payments attract more customers and generate more revenue.
Conclusion
Lipa Mdogo Mdogo has revolutionized the way Kenyans pay for goods and services. The service has made it easier for individuals to transact and purchase goods or services that they would not have been able to afford otherwise. The affordability, convenience, and low-interest rates make the service an attractive payment option for many Kenyans. The service has also helped vendors increase their sales and generate more revenue. Lipa Mdogo Mdogo is, therefore, a game-changer in the mobile payment solutions space in Kenya.
