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Nigerian Digital Bank Lidya is Expanding into Eastern Europe

Nigerian fintech company, Lidya, has announced that it’s expanding into Eastern Europe, in a move that sees it establish a presence outside of its own country for the first time. The lending platform wants to plug the funding gap that exists for SMEs in the region.

It’s starting off with two countries, Poland and the Czech Republic, and will be setting up in their capitals shortly.

Launched in 2016, Lidya currently serves a market of over 30 million SMEs, large enough to have fueled its rapid growth in the past few years. Through its fast credit risk assessment and links with the vast small business landscape, it’s able to give more loans to these emerging enterprises than they would get from traditional banks, and help them build a credit profile.

The fintech company now plans to replicate its successes on the Eastern European front, where SMEs face the same sort of lending problems with their banks as Nigerian entrepreneurs do. It will be banking on the rapid growth in these economies to make its expansion a success.

Lidya plans to give out $1.1 billion in loans in the region within the next five years. Ercin Eksin, the company’s co-founder, says that they will be zeroing in on customers from three sectors: agriculture, pharmaceuticals, and retail.

Business concerns in the region can expect to receive loans of up to $15,000 from the platform, significantly greater than the maximum of $3,000 it offers to customers back in Nigeria. It will be hoping to match the 10,000 loans it’s given in its home country in the past three years.

Lidya has already begun executing its expansion plans. It has hired Tomasz Sekalski, former CEO of Poland’s Idea Money, and Libor Vanicek, former head of retail banking for ING Bank in the Czech Republic, to spearhead its operations in their native countries.

Eksin notes that the foray into Eastern Europe is part of Lidya’s plan to support the growth of 100 million businesses across the world. The company wants to set up in four new countries every year; countries adjacent to Poland and the Czech Republic could have the lending platform present on their soil in the coming months if this pace of expansion is kept up.

Lidya was founded by Tunde Kehinde and Erik Eksin. Both have worked with Jumia, which is now Africa’s first tech unicorn

In its first year, Lidya disbursed loans totaling $2 million to thousands of businesses in Nigeria. That figure grew five times to $10 million in its second year. And in 2018, it got $6.9 million in startup funding from a group of investors, led by Omydiar Network and Alitheia Capital. Prior to this, it had secured $1.25 million in seed funding from Accion Venture Lab, Newid Capital, and a number of angel investors.

With Europe in its sights, the fintech startup now has the opportunity to scale up on two continents.

Featured image source: F6s

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Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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