Watu Credit, the Kenyan asset-financing startup known for funding motorcycles, three-wheelers, and smartphones across Africa, has reported a dramatic 14-fold increase in earnings for 2025, driven largely by rapid expansion in its smartphone financing business.

The Nairobi-based company recorded a net profit of KES 4.8 billion ($37 million) for the financial year ended 31 December 2025, a sharp rise from KES 157 million ($1.2 million) in the previous year.

Revenue also climbed significantly, rising 92.7 per cent to KES 28.3 billion ($219.2 million), according to disclosures from Car & General, which holds a 29 per cent stake in the business.

The results mark a strong rebound for Watu Credit following a challenging 2024, when profits plunged by 85 per cent amid rising loan impairments, foreign exchange losses, and the rising cost of expansion across multiple African markets.

Smartphone financing drives turnaround

A major driver of the company’s recovery was the rapid growth of its smartphone financing division, known internally as Simu.

Car & General noted that performance improved significantly on the back of “Simu growth through the region”, highlighting the increasing importance of mobile device financing in Watu’s business model.

The Simu unit enables customers to acquire smartphones through structured instalment payments, expanding access to internet-enabled devices in markets where upfront affordability remains a significant barrier.

Industry analysts say smartphone financing has become one of the fastest-growing segments within Africa’s asset-financing and micro-lending ecosystem, driven by rising digital adoption and increasing demand for mobile connectivity.

Mobility financing under pressure but stabilising

Watu Credit originally built its reputation through financing motorcycles and three-wheelers, particularly in Kenya’s informal transport sector, where boda boda riders rely heavily on affordable access to vehicles for daily income generation.

However, the company’s traditional mobility financing business has faced pressure in recent years, particularly as loan defaults, currency volatility, and macroeconomic instability affected repayment capacity across several markets.

Despite these challenges, the strong performance of its smartphone financing division helped offset weaker contributions from mobility assets.

Expansion across Africa brings both growth and volatility

In recent years, Watu Credit has expanded aggressively beyond Kenya into Uganda, Tanzania, the Democratic Republic of Congo, Nigeria, and Sierra Leone, positioning itself as one of Africa’s largest non-bank asset financiers.

While this regional expansion has significantly boosted scale, it has also exposed the company to currency depreciation risks and market-specific credit challenges.

In 2024, Watu was particularly affected by foreign exchange volatility in markets such as Nigeria, alongside rising impairment costs in Kenya and Tanzania.

However, according to Car & General, conditions across newer markets have now stabilised, setting the stage for improved performance in 2025 and beyond.

Outlook turns positive as markets stabilise

Looking ahead, Car & General expressed optimism about Watu Credit’s regional performance trajectory.

“In 2026, we expect revenues to grow in Kenya, Uganda, Tanzania, DRC, Nigeria, and Sierra Leone, where operations have now stabilised,” Car & General said. “We are very positive about business prospects and expect continued growth this year.”

The improved outlook comes at a time when investors are increasingly scrutinising the profitability and sustainability of African fintech and lending startups, following a broader slowdown in venture capital funding across emerging markets.

Watu Credit has been positioning itself as a leading player in Africa’s non-bank financial services sector, leveraging asset financing to expand financial inclusion for underserved consumers and informal workers.

In September 2025, the company told TechCabal that it was targeting $340 million in revenue by 2026, alongside plans to expand into Latin America.

The strategy reflects a broader ambition to replicate its African asset-financing model in other emerging markets where access to credit for productive assets remains limited.

Talking Points

It is notable that Watu Credit’s strong 2025 performance reflects how asset financing is increasingly becoming a key driver of financial inclusion across African markets, particularly in sectors such as mobility and smartphone access.

The sharp rise in profitability, driven largely by its Simu smartphone financing unit, highlights how demand for affordable digital access is reshaping lending models and expanding access to internet-enabled devices in underserved communities.

At Techparley, we see this as a clear signal that Africa’s fintech evolution is moving beyond traditional lending into more embedded, asset-backed financing models that directly support productivity and digital participation.

The company’s rebound also underscores the importance of product diversification, as its mobility financing segment faced pressure, while smartphone financing emerged as a stronger and more scalable growth engine.

However, Watu’s expansion across multiple African markets also illustrates the ongoing risks associated with currency volatility, credit impairments, and uneven macroeconomic conditions, which continue to challenge cross-border lending models.

As Watu Credit looks towards further growth and potential expansion into new regions such as Latin America, its ability to balance scale with credit discipline and operational stability will be critical in sustaining long-term profitability.

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