Nigerian Fintech Migrates to Europe
With less than 4 years of operations under its belt, ambitious Nigerian fintech, SME lender Lidya, has announced it will commence its expansion into eastern Europe. The venture-backed Nigerian startup is set to take its fast capital model to Poland and the Czech Republic, and will no doubt be looking to replicate the success it’s had in its home market, having disbursed close to 10,000 loans since the company’s inception in 2016.
Lidya could potentially be the first of a wave of African fintechs to head north into Europe. On Daily Fintech, ‘first the rest then the west,’ is a major theme we have looked at over the past few years. Mobile money, payment-led neobanks and many other digital inclusion stories have swept through developing nations, often maturing far beyond their western counterparts. It has always seemed only a matter of time before innovation flowed the other way.
The impact of this innovation on African economies cannot be discounted – approximately 45% of Kenya’s GDP is estimated to funnel through mobile payments infrastructure. Kenya is one of the ‘troika’ of Sub-Saharan fintech heavyweights, which also includes Nigeria and South Africa. These three nations are where the lion’s share of fintech activity has occurred to date in the region.
Activity in the entire Sub-Saharan region is growing rapidly. The number of new fintechs coming to market has grown by an average of 24% each year over the past decade, according to data released by EY. The firm also notes that the number of international fintechs with a presence in Africa has stabilised over the past few years, potentially suggesting ventures, like Lidya and others, are more than capable of servicing the local economies without Western technology ‘interference’.
As Europe struggles with the fallout of Brexit and Trump’s cool narrative on trade, it seems increasingly likely that fostering more sophisticated trade bridges between Africa and Europe, in service sectors like finance, will receive more attention in the coming years.
Lidya is likely the first of many expansion stories and has the potential, if successful, to put Africa squarely on the global fintech map. Watch this space.