Nigerian digital lender, Lidya, has officially ceased operations after nine years in business, citing severe financial distress.
The closure brings an end to one of Nigeria’s early fintech pioneers that once sought to redefine how small businesses accessed credit.
In an email to customers, the company stated:
“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,” the company stated.
How Lidya began
Founded in 2016 by Tunde Kehinde and Ercin Eksin, both part of Jumia’s founding team, Lidya entered the market with a simple goal to provide fast, collateral-free loans to small and medium enterprises (SMEs) through an online platform.
The company quickly gained traction for its ability to process loans using data-driven assessments rather than traditional collateral, making it one of the most visible players in Nigeria’s emerging digital lending space. On the platform, businesses can create accounts and apply for loans ranging from $500 to $50,000, with decisions made within 24 hours.
Over time, Lidya experimented with different business models in an effort to stay competitive as more fintechs entered the market.
In 2020, Lidya expanded beyond Africa, launching operations in Poland and the Czech Republic to diversify its reach. The company said that it plans to disburse €1 billion ($1.1 billion) in five years to small businesses unable to get bank loans in those markets.
The following year, it raised $8.3 million in a pre-Series B funding round to support this expansion. The funding round was led by Alitheia Capital via its uMunthu Fund. Other investors that participated include Bamboo Capital Partners, Accion Venture Lab and Flourish Ventures.
This new funding brings Lidya’s total raised to $16.5 million, adding $1.3 million seed round raised in 2017 and $6.9 million Series A one year later.
By September 2021, Lidya had issued over 32,000 loans worth nearly $150 million to small businesses across multiple countries, leveraging data from over 100,000 customers and $50 billion in analyzed credit applications.
However, by 2023, the company withdrew from Poland and the Czech Republic, citing plans to refocus on 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.
Launch of Lidya Collect
Following its retreat from Europe, Lidya launched Lidya Collect, a product designed to help businesses recover loans and manage repayments. The tool was seen as a strategic shift to improve cash flow and address repayment challenges among borrowers.
But according to reports, the platform ran into major operational problems. Customers complained of frozen funds and failed transactions that disrupted business operations.
“Our money is stuck. Apart from the money that’s locked up, we’ve layered millions of transactions on the platform, and now that it’s failing, we have to recover those debts manually. It’s been a horrible few months just trying to recover our money,” a customer stated.
In its shutdown notice, Lidya confirmed its inability to process refunds, saying:
“Due to the Company’s financial status, it is unable to process funds or settle claims at this time,” they said.
Internal collapse
Lidya’s shutdown came after months of internal turmoil marked by key executive exits and unpaid staff. Co-founder Tunde Kehinde left the company in October 2024, followed shortly by Chief Technology Officer Cristiano Machado in September.
During the same period, reports indicate that the company’s Portugal-based technology team was disbanded between May and September 2024 after it failed to meet payroll obligations.
The wave of resignations and unpaid salaries exposed deep-seated financial instability, ultimately leading to the company’s closure.
