Lidya, the Nigerian-founded digital lending platform aimed at financing small and medium enterprises (SMEs), has ceased all operations, informing customers it is in “severe financial distress” and is “no longer able to continue in business.”
The collapse marks a stark end for a fintech that had successfully raised a cumulative $16.45 million from notable investors to provide collateral-free loans to underserved businesses across Africa and Europe.
Customer Funds and Financial Distress
The company confirmed the closure in an email sent to users, stating, “Lidya is unable to process funds or settle claims at this time.” This follows months of reports from customers concerning frozen accounts and failed transaction processing.
Lidya, which was founded in 2016 by Jumia alumni Tunde Kehinde and Ercin Eksin, had initially positioned itself as an analytics-first lender, leveraging alternative data to underwrite credit for merchants. Over its operating years, the platform disbursed tens of thousands of loans.
Internal Turmoil and Strategic Shifts
The shutdown appears to be the culmination of severe financial strain exacerbated by internal conflicts. Reports of the company’s final months indicate intense internal turmoil, including the splintering of the partnership between its co-founders, which resulted in an unresolved legal dispute.
In a key strategic move in 2023, Lidya exited its European lending operations in Poland and the Czech Republic, opting to refocus entirely on the Nigerian market with new credit assessment and loan recovery products. However, these efforts ultimately proved insufficient to offset the operational and financial challenges.
The failure of Lidya adds to a growing list of high-profile African startups that have recently faltered, underscoring the severe difficulties and high-risk nature of the continent’s fintech lending landscape amid a tightening global funding environment
