Lidya, Nigerian SME Lending Platform Expands to Europe

Lidya, a lending startup based in Nigeria is looking to extend operations to Poland and the Czech Republic. It wants to use this medium to bridge the funding gaps facing small businesses in Europe. Its major targets are businesses in the agriculture, pharmaceutical and retail sectors.

Lidya is backed by a $6.9 million Series A funding round received in 2018 from Omidyar Network, Accion Venture Lab, Bamboo Capital Partners, Newid Capital, Tekton Ventures and Alitheia Capital. It also raised $1.25 million in a seed round led by Accion Venture Lab for participating in the MasterCard Start Path programme. Lidya plans to disburse $1.1 billion to businesses within the next five years.

Founded by Tunde Kehinde in 2016, Lidya is said to have processed 10000 loans in Nigeria since inception. This expansion move by Lidya serves as a means of testing its online scoring system that captures data to ascertain whether or not to grant short-term loans to business owners.

According to the 2019 report of the Organization for Economic Cooperation and Development (OECD), Poland is among the countries with the highest loan rejection rates for small and medium-sized enterprises. The lending rates for Polish and Czech customers may average $15000, compared to the $3000 issuable for businesses in Nigeria.

In light of the expansion plans, Lidya hired Tomasz Sękalski, the former head of Idea Money SA a Polish factoring company to run its operations in Poland. Lidya will make an initial $10 million capital available for companies and will provide an additional $200 million for expansion.