The digital lender Lidya, based in Nigeria, ceased operations almost ten years after it opened.
In an email to its customers, the company said, “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.”
About Lidya
Established by Ercin Eksin and Tunde Kehinde, both Jumia alumni, Lidya offered quick, collateral-free loans to small and medium-sized enterprises via its online platform. The startup gradually changed its focus and tried various business plans to survive in an increasingly competitive lending market.
As part of its European expansion in 2020, Lidya established operations in Poland and the Czech Republic, in addition to Africa. A pre-Series B round raised $8.3 million the following year. However, the business left both European markets by 2023, citing a renewed emphasis on Nigeria.
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At the time, Kehinde stated, “Nigeria’s tech-savvy lending ecosystem is the ideal launchpad for our solutions, which support data-driven decision-making.”
Challenges with recovering loans
Lidya Collect, a loan recovery platform for businesses created to increase repayment rates and expedite debt collection, was born out of this renewed focus. But the product seems to have had trouble living up to expectations. Affected customers’ reports point to various problems, such as unsuccessful transactions and frozen funds.
Lydia serves SMEs as a sort of digital partner in addition to lending money. The platform gives users access to a digital account where they can compile a database of their diverse clientele. Along with managing their cash flows, customer data, and payment tracking, users can also create an invoice using their company profile and digitally send it to their listed customers.
Worsening concerns
Now that Lidya has formally shut down, customers’ concerns might worsen. In an email to customers, the company stated it was “unable to process funds or settle claims at this time due to the Company’s financial status.”
The closure ends months of internal turmoil. Co-founder Tunde Kehinde and Chief Technology Officer Cristiano Machado departed the company in October and September 2024, respectively, and Lidya’s Portuguese-based tech team left between May and September of the same year due to nonpayment of payroll.