Nigerian Loan Provider Lidya Closes Shop After Severe Financial Distress

By Aduragbemi Omiyale

A local financial technology (fintech), Lidya, has ceased to operate as a business entity after it raised about $16.45 million.

Lidya was established about nine years ago to provide collateral-free loans to small business owners to scale up their operations.

In the past months, the company has been struggling with internal crisis, which saw its Chief Technology Officer, Mr Cristiano Machado, leaving in September 2024, and its co-founder, Mr Tunde Kehinde, exiting the next month, with its tech team based in Portugal disbanded after failing to meet payroll obligations.

Lidya was founded by former employees of Jumia, Mr Tunde Kehinde and Mr Ercin Eksin. To remain in competitive in the Nigerian lending business, they adopted different business models.

In a report by TechPoint Africa, it was disclosed that Lidya decided to close the curtain after experiencing severe financial distress.

“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,” a part of an email to customers quoted by the publication said.

“Due to the Company’s financial status, it is unable to process funds or settle claims at this time,” another part of the message stated.

In 2020, Lidya expanded beyond Africa, setting up operations in Poland and the Czech Republic as part of its European push. The following year, it raised $8.3 million in a pre-Series B round. But by 2023, the company exited both European markets, citing a renewed focus on Nigeria.