Nigerians Increasingly Rely on BNPL for Phones, Credit Direct Report Shows 70% Smartphone Share

The high cost of mid-range Android phones in Nigeria, which can reach ₦280,000—surpassing many workers' monthly earnings—is driving a growing number of Nigerians to utilise Buy Now, Pay Later (BNPL) services. A recent report from Credit Direct indicates that smartphones now constitute 70% of all gadgets purchased via BNPL in Nigeria. Android phones make up the majority of these transactions at 81.4%, with iPhones accounting for 18.6%.

Financial Strain and Entrepreneurial Use

The Nigeria Credit Landscape Report, based on a review of 300,000 Credit Direct customers, reveals that 90% earn less than ₦200,000 monthly, and 36% fall within the ₦50,000 to ₦99,999 income bracket. These income levels make a ₦280,000 smartphone difficult to afford upfront. Consequently, approximately 6 out of 10 BNPL customers opt for repayment terms of five or six months, with 42.7% choosing the maximum six-month option. About 36% spread payments over two to four months, while only 2.5% repay within a single month.

The report attributes these extended tenors to financial strain, as borrowers' monthly cash flow often cannot support faster loan repayment. Stretching payments over several months helps keep monthly installments manageable, allowing them to fit alongside other essential expenses such as rent, school fees, and healthcare—which are identified as the top three reasons people borrow. The user base also shows a strong tilt towards small business owners, who account for 45% of BNPL transactions, compared to 29% from salaried workers. Self-employed individuals also exhibit higher average ticket sizes, spending ₦276,213 per purchase versus ₦230,900 for salary earners. For many entrepreneurs, BNPL has become a crucial tool for acquiring necessary business assets like smartphones, laptops, and office equipment without disrupting their working capital.

Sustainability Concerns and Credit Direct's Role

Overall, the findings suggest that BNPL in Nigeria is evolving beyond a simple consumer payment method, increasingly serving as a financing mechanism for entrepreneurs to acquire assets and foster business growth. However, questions persist regarding the sustainability of this growth. The report cautions that many borrowers are already operating near their financial limits, a situation that could intensify pressure on the consumer credit market should economic conditions deteriorate. The complete 2025 Nigeria Credit Landscape Report is available for download from Credit Direct's website.

Credit Direct aims to be Africa’s leading embedded finance business by integrating credit into partner supply chains and payment flows, thereby enabling financial success for individuals and businesses. The company also offers retail investment solutions, expanding its services beyond credit access to broader financial growth and wealth-building. Having served millions of customers nationwide, including those traditionally underserved by conventional banking, Credit Direct operates as a wholly owned subsidiary of First City Monument Bank (FCMB) Group Plc.

What this means for Africa: The report highlights a critical shift in how Nigerians, especially small business owners, are accessing essential technology and financing, underscoring both opportunity and potential risks within the continent's consumer credit market.