1st Nigerian Online Bank To Be Unveiled in New York

Fredrick Ngugi September 20, 2016
Tunde Kehinde and Ercin Eksin, the co-founders of Lidya - the first-ever Nigerian online bank. Bella Naija

Nigerians will soon enjoy a new banking experience with the much-anticipated, first-ever Nigerian online bank, Lidya, set to be unveiled in New York Thursday, reports Bloomberg.

Lidya, an online-only bank, is the brainchild of Tunde Kehinde and Ercin Eksin — two prominent digital entrepreneurs and former managers at Jumia and cofounders of Africa Courier Express.

According to Kehinde, a graduate of Harvard Business School, the branchless bank will be based in Lagos, Nigeria, and will offer unsecured loans between $500 and $15,000 to small- and- medium-sized businesses.

“There are no real products catered to these customers today. What we’re trying to do is introduce a lot of technology, algorithms and machine learning to industrialize the credit assessment process,” Kehinde says.

Although the bank is currently targeting Nigerian customers, Kehinde, a Lagos-born entrepreneur, says they plan to expand to several other African cities.

How Viable?

As much as the online-only bank is an auspicious idea, some people have questioned its viability given that it is targeting small and medium businesses that don’t require security for credit.

In an attempt to dispel these fears, Kehinde says the bank is a better option for small enterprises since it will be offering them cheaper credit with reduced risk of foreclosure.

“Their (bricks and mortar banks) cost structure isn’t favorable to servicing small businesses. Because we’re using technology and algorithms to assess the risk, it allows them to offer financial products to these customers at a low cost,” Kehinde notes.

While Kehinde and Eksin remain the majority shareholders of the bank, they will be bringing in other shareholders in the coming months in a bid to raise more capital.

They hope to raise more than $1 million from investors, primarily from the United States, according to Eksin.

Last Edited by:Abena Agyeman-Fisher Updated: June 19, 2018


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