Mobile Phones, Rent-to-Own Payments & Water Filters: Evidence from Kenya

Abstract

Uptake of safe water products remains low, in spite of modest cost. We experimented with a sales offer that combined a free trial and rent-to-own payments for durable filters. Purchase rates doubled under this sales offer to 31% compared to a traditional lump-sum sales contract. To lower transaction costs we collected payments using Kenya’s vast mobile banking network, MPESA. Mobile repayment rates were low; many filters were paid only when a vendor came in-person to request payment, which adds social pressure. While the rent-to-own offer is attractive, more work is needed to reduce transaction costs in rural and peri-urban Kenya.