Nigeria’s Lidya has raised a US$1.25 million seed funding led by Accion with participation from Newid Capital and several angel investors to accelerate product development and further develop its team.

According to Tunde Kehinde, the co-founder of Lidya, “This round of funding and backing from our world-class group of investors is a strong validation of the potential of fintech in Africa and will position the company to be the go-to source of financing for entrepreneurs looking to grow their business,” said Ercin Eksin, co-founder of Lidya.

Launched in September 2016  by Lidya’s latest funding round will help it further expand its mission of easing access to finance for small and medium enterprises (SMEs) across Africa.

Lidya’s credit algorithms allow small businesses to build a credit score and access financing in less than 48 hours to grow their businesses. The firm currently operates in Nigeria where 20,000 businesses have registered for the service. Lidya’s digital platform uses over 100 different data points to help any SME access much-needed working capital and build a customized credit score.

The International Finance Corporation (IFC) estimates that the emerging market MSME financing gap alone stands at more than US$2 trillion. MSMEs contribute up to 33 percent of GDP in emerging economies, but face a significant shortage of capital to fund their businesses.

Lidya aims to solve the credit problem by financing businesses spanning the agriculture, consumer goods, services, and creative industries, among others, and is targeting ₦1.5 billion in loan originations to SMEs in Nigeria in its first year of operations.

“Small businesses around the world today are unable to get the financing they need to grow and thrive,” said Michael Schlein, CEO and President of Accion. “Innovative fintech startups like Lidya are addressing this need with technology and new sources of information to help entrepreneurs obtain the necessary capital to hire employees, expand to new markets, and sustain successful businesses.”