Nigerian digital lending startup Lidya has officially shut down operations after nearly a decade in business, marking a dramatic fall for one of Africa’s early fintech success stories. The company, founded in 2016 by Tunde Kehinde and Ercin Eksin, both former Jumia executives, cited severe financial distress and unsustainable operating conditions as reasons for the closure.
Lidya, which gained prominence for offering quick, collateral-free loans to small and medium-sized enterprises (SMEs) across Nigeria and other emerging markets, was once seen as a model for digital financial inclusion in Africa. The startup later expanded its footprint to Europe, with operations in Poland and the Czech Republic, and raised a total of $16.45 million from investors including Accion Venture Lab, Alitheia Capital, Bamboo Capital Partners, and Omidyar Network.
However, the company’s fortunes began to wane in recent years as it battled mounting financial challenges, declining investor confidence, and internal management disputes. Sources close to the company reported that prolonged liquidity shortages and a shrinking loan book made it increasingly difficult to sustain operations or meet customer obligations.
Throughout 2025, Lidya faced a surge of customer complaints on social media and online forums, with users alleging frozen funds, failed withdrawals, and unresponsive customer support. By mid-year, several senior executives had reportedly exited the company amid growing uncertainty about its financial health.
Industry analysts say Lidya’s collapse reflects the harsh realities of the African digital lending landscape, where rising default rates, regulatory pressure, and limited access to long-term capital have forced many fintechs to scale back or shut down.
Once hailed as a pioneer in leveraging data analytics and alternative credit scoring to empower small businesses, Lidya’s demise underscores the fragility of high-growth fintech models that rely heavily on external funding and market expansion.
Neither Kehinde nor Eksin has made a public statement regarding the shutdown, but insiders suggest the founders had explored restructuring options and potential acquisitions before ultimately deciding to wind down the business.
Lidya’s closure marks a sobering moment for Nigeria’s vibrant fintech sector, serving as a reminder that innovation alone is not enough to guarantee sustainability in an increasingly competitive and capital-intensive industry.
