Yet for many Ugandans, the high cost of purchasing a smartphone outright remains beyond reach. This has fuelled the growing popularity of hire-purchase arrangements, commonly known as "phones on credit," where customers make an initial payment before clearing the balance through weekly or monthly instalments.
With smartphone ownership in Uganda steadily rising, industry players say hire-purchase schemes are helping bridge the affordability gap while enabling more people to participate in the digital economy.
John Walugembe, an economist and Executive Director of the Federation of Small and Medium Enterprises (FSME), says the innovation by local entrepreneurs has addressed a real market need.
"Ugandan entrepreneurs have come up with a solution to an existing problem. Most Ugandans cannot afford the best smartphones on the market due to the high costs, and initiatives like issuing phones on credit will be highly impactful," Walugembe said.
He argues that affordability remains the biggest obstacle preventing many Ugandans from owning smartphones and believes the government should develop guidelines to regulate providers offering such services.
"The cost of smartphones in Uganda is one of the highest in the region, and this explains why many Ugandans are embracing initiatives like obtaining phones on credit," he added.
However, Walugembe cautioned consumers to carefully consider interest charges and repayment terms before signing agreements.
"People should weigh the repayment obligations against their incomes to avoid defaulting, which may eventually limit their access to the devices," he said.
He also urged the government to review import duties and taxes on smartphones to make them more affordable and accelerate digital inclusion.
For many users, the arrangement has made smartphone ownership possible.
Ramlah, a businesswoman in Kampala, said buying her smartphone through a hire-purchase arrangement enabled her to continue investing in her business while spreading the cost over time.
"I was required to provide a copy of my National Identity Card and a phone number registered in my names. I paid 60 per cent upfront and agreed to clear the remaining 40 per cent over six weeks. I knew my business would generate enough income for me to complete the payments," she said.
"The beauty of hire purchase is that you begin using the phone before fully paying for it."
However, not every experience has been smooth.
Andrew Twahira, a student at Makerere University, said many financed phones are installed with security software that automatically restricts access when scheduled payments are missed.
"It is a good initiative, but service providers should be more considerate before switching off phones when someone misses payment for a day or a week," he said.
"We are human beings, and sometimes circumstances make it difficult to pay on time. Losing access to the phone can mean missing important communication."
Phone dealers, meanwhile, say they also face significant risks.
Stanley Ssempijja, proprietor and Chief Executive of Sage Buyers, an iPhone dealership, said his company allows customers to acquire phones after paying 60% of the purchase price before clearing the balance through weekly instalments.
"Our goal is to make iPhones more accessible to Ugandans. Customers who genuinely communicate when they face financial challenges are usually given a grace period," Ssempijja said.
He noted that one of the biggest challenges is loan default, with some customers reportedly using financed phones as collateral to secure loans from informal moneylenders.
"With more than seven years in this business, we have encountered different situations. Fortunately, our phones are insured, which helps minimise losses," he said.
Ssempijja advised prospective buyers to verify the actual market value of phones, understand the repayment terms and deal only with reputable providers.
As hire-purchase arrangements continue to grow in popularity, experts say they could play an important role in expanding digital access across Uganda.
However, they caution that without proper regulation, transparent lending terms and responsible borrowing, the same innovation could expose consumers to financial distress instead of empowering them.