Lending fintech Lidya shuts operations in Europe to focus on Nigeria
Lidya, the SME lending company founded by Tunde Kehinde, a co-founder of Jumia, has decided to close its European lending operations in Poland and the Czech Republic. The company, which has been in operation for seven years, is shifting its focus to the Nigerian market, concentrating on the growth of its new credit assessment and loan recovery offering.
The move is part of Lidya's strategic decision to emphasize its Lydia Collect tool, developed last year for its in-house SME lending business. This tool has since become central to Lidya's new business direction. Lidya Collect is based on the technology supporting Nigeria's Global Standing Instruction (GSI), a system that enables connected lenders to directly debit the accounts of loan defaulters in other banks.
Kehinde highlighted Nigeria's tech-savvy lending ecosystem as the ideal launchpad for their solutions, particularly those supporting data-driven decision-making. The company worked in collaboration with the Nigerian Inter-Bank Settlement System (NIBSS) to build Lidya Collect on top of the existing GSI infrastructure. This strategic shift underscores Lidya's commitment to leveraging innovative solutions within the Nigerian market for credit assessment and loan recovery.
Despite their crucial role in economies worldwide, Small and Medium-sized Enterprises (SMEs) are confronted with a substantial credit gap estimated at $4.5 trillion. In Africa, where SMEs represent over 90% of businesses and nearly 80% of employment, the financing gap is reported to be $421 billion, according to the African Development Bank (AfDB). Lidya, since its establishment in 2016, has been actively addressing this challenge. The company reports analyzing credit application data exceeding $50 billion from approximately 100,000 potential customers. Through its services, 32,500 small businesses have successfully secured a total of $150 million in funding. This highlights the tangible impact of Lidya's data-driven solutions in bridging the credit gap and supporting the financial needs of SMEs. Lidya's commitment underscores the potential of leveraging technology to facilitate credit access, thereby contributing to the growth and sustainability of small businesses in the markets it serves.