Lidya, the Nigerian digital lending platform that aimed to revolutionize access to finance for small and medium-sized businesses (SMEs), has formally ceased all operations due to severe financial distress. After nearly a decade since its launch, the company informed its customers via email that, despite extensive efforts to restructure and sustain its business, it is no longer able to continue, citing an inability to process funds or settle claims at this time.

Founded in 2016 by Jumia alumni Tunde Kehinde and Ercin Eksin, Lidya’s initial mission was to provide SMEs with fast, collateral-free loans through its innovative digital platform. Utilizing credit-scoring algorithms, the Lagos-based startup offered quick access to working capital within 48 hours, facilitating business expansion. Beyond direct lending, Lidya also functioned as a digital partner, offering users digital accounts to manage customer databases, create invoices, track payments, and streamline cash flows.

Lidya demonstrated significant potential in its early years, raising approximately $16.45 million between 2017 and 2021. This included a notable $6.9 million Series A round in May 2018, led by Omidyar Network, and an $8.3 million pre-Series B funding round in July 2021, led by Alitheia Capital through its uMunthu Fund. At its peak, the company reviewed over $50 billion in credit applications and disbursed more than $150 million to 32,000 small businesses, signaling its impact on the fintech landscape.

In a bid for international growth, Lidya expanded beyond Africa in 2020, establishing operations in Poland and the Czech Republic as part of a broader European push. However, by 2023, the company reversed course, exiting both European markets to renew its focus on Nigeria. Co-founder Tunde Kehinde emphasized Nigeria's tech-savvy lending ecosystem as an ideal launchpad for their data-driven solutions.

Despite the renewed focus on its home market, Lidya encountered significant operational challenges and leadership issues that ultimately contributed to its downfall. This shift in strategy birthed Lidya Collect, a loan recovery platform designed to improve repayment rates and streamline debt collection for businesses. However, the product appears to have fallen short of expectations, with affected customers reporting widespread issues such as frozen funds and failed transactions, leading to the arduous task of manual debt recovery.

The company’s final months were marked by internal turbulence. Reports indicate that Lidya's tech team, based in Portugal, disbanded between May and September 2024 due to the company's failure to meet payroll obligations. Key leadership figures also departed, with Chief Technology Officer Cristiano Machado exiting in September 2024, followed by co-founder Tunde Kehinde stepping down from his CEO role and leaving the company in October 2024. The formal closure of operations is projected for October 2025.

The closure of Lidya leaves many customers in a precarious position, with funds reportedly stuck and the company unable to settle claims due to its dire financial status. This development underscores the critical importance of sustainable growth and robust operational management within the rapidly evolving African fintech industry, even for startups that have attracted substantial funding and shown promising early traction.