After nearly a decade in operation, Nigerian fintech startup Lidya has officially shut down, marking the end of one of Africa’s early digital lending pioneers.
In a message shared with its customers, the company announced:
“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.”
Founded in 2016 by Tunde Kehinde and Ercin Eksin, both former executives at Jumia, Lidya set out to transform lending for small and medium enterprises (SMEs) through collateral-free loans powered by data analytics and digital credit assessments. The fintech quickly became one of Nigeria’s most talked-about startups, promising to bridge the credit gap for small businesses underserved by traditional banks.
Over the years, Lidya expanded beyond Nigeria, launching operations in Poland and the Czech Republic in 2020 to target new markets. That same year, the startup raised $8.3 million in a pre-Series B round, bringing its total funding to $16.5 million. By 2021, it had approved more than 32,000 loans worth about $150 million, analyzing credit data from over 100,000 customers and processing more than $50 billion in loan applications.
However, challenges soon emerged. By 2023, the company withdrew from its European operations and refocused on Nigeria, launching a repayment management tool called Lidya Collect. The product was designed to help businesses track and recover outstanding debts, but technical glitches caused major setbacks. Many users complained of frozen funds and failed transactions, with one customer lamenting: “Our money is stuck … Now that it’s failing, we have to recover those debts manually.”
In its closure notice, the company further stated: “Due to the Company’s financial status, it is unable to process funds or settle claims at this time.”
Lidya’s final years were marred by leadership exits and unpaid salaries. Co-founder Tunde Kehinde reportedly left in October 2024, followed by the CTO a month earlier. The company’s Portugal-based tech team was also dissolved earlier in 2024 over wage arrears, signaling deep internal struggles.
Once celebrated as a rising force in Africa’s fintech space, Lidya’s fall underscores the growing challenges startups face in sustaining high-risk lending models amid economic headwinds, funding pressures, and operational complexities.
