Digital-lending startup Lidya has formally ceased operations in Nigeria, ending a near-decade run within the small and medium-sized enterprise (SME) credit score market regardless of elevating roughly US$16.45 million from buyers.
Established in 2016 by former Jumia executives Tunde Kehinde and Ercin Eksin, Lidya got down to serve Nigerian SMEs by way of a technology-first, collateral-free lending mannequin.
Over its lifetime the corporate claimed to have reviewed greater than US$50 billion in credit score purposes and disbursed upward of US$150 million throughout 32,000 companies.
Funding & Development
Between 2017 and 2021 Lidya secured a number of funding rounds:
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A seed spherical (~US$1.25 m) led by Accion Enterprise Lab.
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A Sequence A spherical of ~US$6.9 m in 2018.
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A pre-Sequence B of ~US$8.3 m in 2021, bringing complete identified fairness funding to about US$16.45 m.
With that capital the corporate expanded into Europe (Poland and the Czech Republic) earlier than refocusing on Nigeria by 2023.
Operational Pressure & Shutdown
In a customer discover Lidya acknowledged: “Regardless of greatest efforts to restructure and maintain operations, the corporate has encountered extreme monetary misery and is now not in a position to proceed in enterprise. … As a result of firm’s monetary standing, it’s unable to course of funds or settle claims at the moment.”
Reported crimson flags included:
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Management exits: CEO Tunde Kehinde and CTO Cristiano Machado departed in late 2024.
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Buyer complaints: frozen funds, failed transactions, and delayed repayments by way of the platform’s restoration product dubbed “Lidya Gather”.
Trade analysts word mounting credit score threat, tightening funding circumstances, and aggressive progress targets drained operational buffers.
Implications for Stakeholders
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Debtors and customers: SMEs and people who used the platform now face uncertainty over excellent balances, mortgage servicing and entry to beforehand credited funds.
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Buyers & lenders: The collapse underscores the excessive execution threat in frontier-market digital lending, even with substantial fairness backing.
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Fintech ecosystem & regulators: The shutdown is more likely to speed up regulatory scrutiny round digital credit score, wallet-linked deposits, shopper safety and contingency planning for platforms in misery.
Ahead Outlook
Regulators such because the Central Bank of Nigeria (CBN) could observe up on fiduciary obligations surrounding consumer funds and the wind-down course of. Lenders within the SME fintech house could reassess underwriting, collections infrastructure, geographic enlargement methods, and the sustainability of growth-first fashions underneath tighter capital circumstances.
Lidya’s exit serves as a cautionary story in Nigeria’s burgeoning digital lending sector: sturdy fairness backing and a promising worth proposition don’t assure longevity in an atmosphere the place credit score threat, liquidity administration and operational self-discipline are underneath intense stress.
For stakeholders—from debtors and buyers to regulators—the episode reinforces the crucial of aligned incentives, clear governance and strong contingency frameworks.