Lidya, the SME lending company founded by Tunde Kehinde, one of Jumia’s original co-founders, has closed its European lending business to focus on growing its new credit assessment and loan recovery offering for the Nigerian market.
The 7-year-old company is leaving Poland and the Czech Republic 3 years after taking its small business lending business to Eastern Europe. It will now focus on Lydia Collect, a loan recovery tool initially developed last year for Lydia’s in-house SME lending business but has since become a linchpin for Lydia’s new business direction. “Nigeria’s tech-savvy lending ecosystem is the ideal launchpad for our solutions, which support data-driven decision-making,” Tunde Kehinde, co-founder and CEO of Lidya, said in a press statement.
Lidya Collect was built on top of the technology that underpins Nigeria’s Global Standing Instruction (GSI), Carolina Rodriguez, Lidya’s communications lead, told TechCabal. The GSI is a last-resort system that allows connected lenders to directly debit the accounts of loan defaulters in other banks. Lidya said it worked with the Nigerian Inter-Bank Settlement System (NIBSS) to build Lidya Collect on top of the existing GSI infrastructure.
The digital lender also announced Lidya Bridge, a credit assessment offering launched in October 2023. Bridge will analyse 300 data points from borrowers’ bank statements to make the process of assessing new loan customers smoother. Lidya will focus on selling Collect and Bridge to micro-finance institutions and other financial service providers. The company says it has already signed more than 50 lenders and microfinance banks.
The company says it has analysed more than $50 billion of credit application data from 100,000 potential customers. 32,500 of those small businesses have received $150 million since its founding in 2016.