Telenor and Kistpay partner for smartphone financing 

Telenor Pakistan and Kistpay have joined forces to offer Shariah-compliant smartphone instalment plans for Telenor customers. This collaboration aims to promote smartphone ownership and digital inclusion for middle and low-income customer groups.

The partnership is part of the ‘Smartphone for All’ initiative that Kistpay and GSMA launched in October 2022. GSMA is a global association of mobile operators and companies that works to advance the mobile industry and support digital transformation. 

The signing ceremony, which took place on July 13, was attended by Irfan Wahab Khan, CEO of Telenor Pakistan, and Ali Abbas Sikander, CEO of Kistpay. They were joined virtually by Julian Gorman, Head of APAC Region GSMA; Saira Faisal, Country Lead GSMA; and Jeanette Whyte, Head of Public Policy APAC GSMA.

This marks the second instalment-based mobile financing arrangement that Kistpay has achieved in 2023, with the first being achieved through their agreement with Jazz earlier in the year.

Understanding this marriage of companies 

“Our core business provides data and connectivity services and does not entail lending or loans for handset purchases,” Khurrum Ashfaque told Profit in an earlier interview. 

“Any entity seeking to enter the phone financing arena can collaborate with telecommunications providers. Our contribution to this ecosystem comprises an extensive network of franchises and retailers throughout the country, as well as a comprehensive analytical database of consumer behaviour, usage, and demographics that can facilitate the identification of suitable users for smartphone purchases.,” Ashfaque elaborated.  Profit has covered the intricacies of phones being sold on instalments in an earlier article for those interested. 

Read more: Why don’t we have phone plans in Pakistan?

So, is Kistpay the only one that stepped up to collaborate with Telenor then? 

When asked why they chose Kistpay as their partner, Telenor stated that “KistPay’s mission aligns seamlessly with our own, as they are devoted to creating social impact by offering effortless access to smartphone financing, particularly for the unbanked population.”

“We acknowledge that providing smartphones to individuals currently excluded from the connected world can revolutionise their lives. By capitalising on the synergies between our two organisations, we aim to create opportunities for individuals to participate in the digital economy and empower these segments of society to unlock their potential – fostering a more inclusive society,” they added.

What do the two aim to achieve out of this relationship

When asked about any milestones they seek to achieve with this relationship, Telenor stated that “through this partnership, we envision a society where barriers to smartphone ownership and digital access are eliminated – allowing individuals from all walks of life to harness the power of connectivity and digital services.”

Furthermore, Telenor added that “together, we are dedicated to building a digitally inclusive Pakistan where connectivity and smartphones are accessible to all, thereby driving socioeconomic progress and shaping a brighter, more prosperous future for our nation.”

“At Kistpay, we firmly believe that access to the internet is a fundamental need and that the fastest way to get connected to the digital ecosystem is through a smartphone,” stated Khurram Shaikh, Chief Technology Officer at Kistpay. Shaikh continued, “In Pakistan, almost half of the population is not connected to the internet – a reality we are dedicated to changing.”

How will the technology behind this instalment financing work?  

The two most salient questions that arise when any form of financing arrangement is discussed are: how will the creditworthiness of potential customers be ascertained and how will the lender hedge for non-performing loans (NPL)?

“To enable this bottom of the pyramid – the largest and poorest socio-economic group in the world – we have built a sophisticated, homegrown tech stack that enables us to analyse alternative data and make instantaneous loan approval decisions in the absence of formal data points,” Shaikh explained. “Creditworthiness checks are built on both formal and alternate data points, and underwriting is done using alternate data points to construct a digital score – based on which we make our decisions,” Shaikh added.

In terms of hedging for NPLs, Shaikh states, “We have also developed our own proprietary algorithm for device locking and we use this feature to lock devices remotely when someone defaults. We are dedicated to solving this problem through cutting-edge technology.” More details regarding the locking system could not be obtained as Shaikh stated that he could not disclose much information pertaining to their proprietary and copyrighted technology.