Lagos-based fintech startup Lidya is set to begin its international expansion. The online SME-focused credit provider has made known its intentions to expand operations to Eastern Europe with a focus on Poland and Czech Republic.
Founded in 2016 by Ercin Eksin and Tunde Kehinde, the startup provides small business owners access to working capital they can use to expand their business operations. It uses credit-scoring smart algorithms and technology to predict a customer’s creditworthiness.
Since inception, Lidya has been widely adopted by SMEs in Nigeria, disbursing over 10,000 loans in the process – thanks to the huge credit gap in the country. Which is why the startup now has eyes on fast-growing European economies where similar opportunities in huge funding gaps are present.
According to a 2019 report by the Organisation for Economic Cooperation and Development (OECD), Poland is among the countries with the highest loan rejection rates for small and medium enterprises.
In these new markets, Lidya plans to disburse $1.1 billion worth of loans to small businesses unable to get bank loans over the next 5 years. Its focus is on businesses in the agriculture, pharmaceutical, and retail sectors.
Already, Lidya has hired the former head of Polish factoring company Idea Money SA, Tomasz Sękalski, to run its operations in the country. Also, it is expected that the startup’s lending agreements for Polish and Czech customers may average $15,000, which is about five times the value of the average recorded in Nigeria at $3,000.
The expansion will also put to test Lidya’s online scoring system, as it will be expected to capture data and make fast decisions on whether to grant short-term loans to customers.
This move to Poland, Czech Republic, is one of the many expansions to be expected from the fintech startup over the next few years. Lidya plans to expands to four countries every year, including other potential eastern European markets. And with each expansion the startup will provide $200 million in pursuit of its growth plans.
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