Accion Venture Lab has backed Lidya to bridge the capital gap for small businesses in Nigeria.
The International Finance Corp. estimates a $2 trillion global gap in small business financing in emerging markets, where small businesses contribute one-third of GDP.
With technology and new sources of data, fintech startups like Lidya can “help entrepreneurs obtain the necessary capital to hire employees, expand to new markets, and sustain successful businesses,” said Accion’s Michael Schlein.
In Nigeria, 20,000 agriculture, consumer goods, and creative industry businesses have registered for Lidya’s service, which uses more than 100 data points and an algorithm to allow companies to build a credit score and access finance.
Lidya plans to originate almost $5 million in loans to Nigerian businesses in its first year.
Newid Capital and a group of angel investors joined Accion in the $1.25 million seed round.
This post originally appeared in ImpactAlpha's daily newsletter. Get The Brief.
Photo credit: Thewillnigeria.com