Nigerian digital lender Lidya has officially ceased operations after nine years, marking the end of one of Nigeria’s early fintech innovators. The company cited severe financial distress as the reason for shutting down.
In an email to its customers, Lidya 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.”
From rapid rise to shutdown
Founded in 2016 by Tunde Kehinde and Ercin Eksin, both part of the founding team at Jumia, Lidya entered the market with a bold mission—to make it easier for small and medium-sized enterprises (SMEs) to access loans without collateral.
The platform became popular for its data-driven loan assessment model, offering businesses loans between $500 and $50,000, often approved within 24 hours. This positioned Lidya as a trailblazer in Nigeria’s growing digital lending space.
By 2021, the company had issued over 32,000 loans worth nearly $150 million, analyzing more than $50 billion in credit applications across Nigeria and other markets.
Global expansion and funding success
To diversify its operations, Lidya expanded into Poland and the Czech Republic in 2020, with an ambitious goal of disbursing €1 billion in loans over five years.
The following year, it raised $8.3 million in a pre-Series B round led by Alitheia Capital through its uMunthu Fund, with participation from Bamboo Capital Partners, Accion Venture Lab, and Flourish Ventures.
This brought Lidya’s total funding to $16.5 million, including its earlier $1.3 million seed round (2017) and $6.9 million Series A (2018).
Challenges and retreat to Nigeria
Despite early success, Lidya struggled to sustain its European expansion and withdrew from Poland and the Czech Republic in 2023, refocusing on Nigeria’s lending market.
That same year, the company launched Lidya Collect, a repayment management tool designed to help businesses recover loans and improve cash flow. However, the product soon faced operational issues, with users reporting frozen funds and failed transactions.
One affected customer told reporters:
“Our money is stuck. We’ve processed millions of transactions on the platform, and now that it’s failing, we’re left to recover debts manually. It’s been a horrible experience.”
In its shutdown notice, Lidya confirmed it could not process refunds or settle outstanding claims due to its financial state.
Internal struggles and collapse
Lidya’s closure follows months of internal turmoil, including executive resignations, unpaid salaries, and mass staff exits.
Co-founder Tunde Kehinde departed in October 2024, followed by Chief Technology Officer Cristiano Machado in September. The company’s Portugal-based tech team was reportedly dissolved between May and September 2024 after payroll failures.
The wave of resignations and unaddressed financial troubles eventually culminated in the company’s total shutdown—ending what was once one of Nigeria’s most promising fintech success stories.
Emmanuel Bassey is a Financial Expert that has worked in the Banking and Finance Industry for over 15+ years across different banks in Nigeria
