There was once a time when walking into Pep stores meant you wanted to buy socks or other clothing items. Today, you might leave with a financed smartphone and a SIM card repayment plan.
In its 2025 financial report, Pepkor, one of South Africa’s biggest retailers, reported that its cellular rental business, FoneYam, is growing.Â
The company’s phone-rental book ballooned to R2.6 billion ($158 million) in six months, up from R1.7 billion ($103 million) in the previous year. The retailer activated 1.3 million new FoneYam accounts during the period, pushing its active customer base to 2.4 million people.
What makes this more interesting is that overall phone sales barely moved. Pepkor sold around 6.7 million handsets during the half-year period, almost the same as last year. Meaning the real growth story is financing access to phones.
Isn’t Pepkor supposed to be a clothing store? Pepkor owns brands like Ackermans, Tekkie Town, Dunns, Refinery, Legit, and has a 6,000-store network within South Africa. But over the last few years, the company has applied cosmetics and transformed itself into more than a retail fashion business. It is working.Â
It now operates a massive financial services ecosystem that includes loan offerings through Capfin, insurance through Abacus, and smartphone financing through FoneYam.Â
In November 2025, it announced plans to launch Pep Bank through a partnership with Investec, one of South Africa’s largest banks.
South Africa’s telecom market is becoming… interesting: Pepkor said it now has 8 out of 10 South Africans buying prepaid phones from its stores and continues generating ongoing service revenue.Â
Its financing model spreads the costs of phones into smaller payments, making smartphone ownership more accessible to people who may not qualify for traditional credit. Its growth shows that the company helping South Africans afford smartphones may be just as important as the companies building the mobile networks.