Nigerian digital lender Lidya has officially shut down after nine years of operations, bringing an end to one of the country’s earliest fintech pioneers, which once sought to redefine access to credit for small and medium-sized enterprises (SMEs).
In an email sent to customers, the company cited “severe financial distress” as the reason for its closure, confirming that it could no longer sustain operations or meet financial obligations.
“Despite best efforts to restructure and sustain operations, the company has encountered severe financial distress and is no longer able to continue in business. As a result, the company has ceased all operations,” Lidya stated in the notice.
A Promising Start
Founded in 2016 by Tunde Kehinde and Ercin Eksin, both part of Jumia’s founding team, Lidya entered Nigeria’s fintech scene with a bold ambition to make credit accessible to SMEs without traditional collateral.
The platform allowed businesses to create accounts, apply for loans ranging from $500 to $50,000, and receive decisions within 24 hours, using proprietary data-driven assessments instead of physical assets.
At its peak, Lidya was considered a trailblazer, helping thousands of Nigerian businesses unlock credit and fueling optimism about fintech’s potential to fill the gaps left by traditional banks.
Rapid Expansion and Big Funding
By 2020, Lidya had its sights set beyond Africa. The company launched operations in Poland and the Czech Republic, positioning itself as a bridge for underserved small businesses in Europe.
At the time, the company announced plans to disburse €1 billion ($1.1 billion) in loans within five years, a move that earned it widespread investor interest.
A year later, Lidya raised $8.3 million in a pre-Series B round led by Alitheia Capital via its uMunthu Fund, with participation from Bamboo Capital Partners, Accion Venture Lab, and Flourish Ventures.
This brought its total funding to $16.5 million, following a $1.3 million seed round (2017) and $6.9 million Series A (2018).
By September 2021, Lidya claimed to have issued over 32,000 loans worth nearly $150 million across multiple countries, analysing more than $50 billion in credit applications from 100,000 customers.
Refocusing on Nigeria
However, the company’s international ambitions soon faltered.
By 2023, Lidya announced its withdrawal from Poland and the Czech Republic, citing a renewed focus on its home market, Nigeria.
“Nigeria’s tech-savvy lending ecosystem is the ideal launchpad for our solutions, which support data-driven decision-making,” co-founder Kehinde said at the time.
That same year, Lidya introduced Lidya Collect a digital tool designed to help businesses manage repayments and recover outstanding loans.
The pivot aimed to strengthen the company’s local foothold and improve its cash flow management.
Operational Struggles and Customer Frustration
Despite initial optimism, the Lidya Collect platform faced major operational setbacks.
Users began reporting frozen funds, failed transactions, and long delays in accessing balances.
“Our money is stuck. We’ve layered millions of transactions on the platform, and now that it’s failing, we have to recover debts manually. It’s been a horrible few months,” one affected business owner told Tech Sudor.
In its shutdown notice, Lidya confirmed its inability to process refunds, stating:
“Due to the company’s financial status, it is unable to process funds or settle claims at this time.”
The statement effectively left customers and merchants uncertain about the recovery of their locked funds.
Internal Collapse and Leadership Exodus
Behind the scenes, Lidya’s troubles ran deeper than technical glitches.
By late 2024, the company had been battling liquidity issues, missed payroll, and a wave of senior staff departures.
Co-founder Tunde Kehinde left the company in October 2024, followed by Chief Technology Officer Cristiano Machado in September.
Reports suggest that Lidya’s Portugal-based technology team was disbanded between May and September 2024, after the firm failed to meet salary obligations for several months.
The internal collapse, coupled with growing customer complaints and regulatory pressure, eventually led to the company’s closure.
A Sobering End to an Early Fintech Dream
Lidya’s shutdown marks another major exit in Nigeria’s fintech ecosystem, underscoring the challenges of building sustainable digital lending models in volatile economic environments.
Despite its early promise, robust funding, and expansion drive, the company struggled to maintain profitability and navigate mounting credit defaults, rising costs, and regulatory constraints.
For many, Lidya’s rise and fall serve as a reminder that while Nigeria’s fintech scene remains one of Africa’s most dynamic, it is also one of the toughest to survive in.
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